NRS 104A.200Law applicable to transactions entered into before January 1,
1990.Transactions validly entered
into before January 1, 1990, and the rights, duties and interests flowing
therefrom remain valid thereafter and may be terminated, completed, consummated
or enforced as required or permitted by rules of law in effect before that
date.

(a) “Buyer in ordinary course of business” means
a person who, in good faith and without knowledge that the sale to him or her
is in violation of the ownership, rights or security interest or leasehold
interest of a third party in the goods buys in ordinary course from a person in
the business of selling goods of that kind but does not include a pawnbroker.
“Buying” may be for cash or by exchange of other property or on secured or
unsecured credit and includes acquiring goods or documents of title under a
preexisting contract for sale but does not include a transfer in bulk or as
security for or in total or partial satisfaction of a money debt.

(b) “Cancellation” occurs when either party puts
an end to the lease contract for default by the other party.

(c) “Commercial unit” means such a unit of goods
as by commercial usage is a single whole for purposes of lease and division of
which materially impairs its character or value on the market or in use. A
commercial unit may be a single Article, as a machine, or a set of Articles, as
a suite of furniture or a line of machinery, or a quantity, as a gross or
carload, or any other unit treated in use or in the relevant market as a single
whole.

(d) “Conforming” goods or performance under a
lease contract means goods or performance that are in accordance with the
obligations under the lease contract.

(e) “Consumer lease” means a lease that a lessor
regularly engaged in the business of leasing or selling makes to a lessee who
is a natural person and who takes under the lease primarily for a personal,
family or household purpose.

(f) “Fault” means wrongful act, omission, breach
or default.

(g) “Finance lease” means a lease with respect to
which:

(1) The lessor does not select,
manufacture or supply the goods;

(2) The lessor acquires the goods or the
right to possession and use of the goods in connection with the lease; and

(3) One of the following occurs:

(I) The lessee receives a copy of
the contract by which the lessor acquired the goods or the right to possession
and use of the goods before signing the lease contract;

(II) The lessee’s approval of the
contract by which the lessor acquired the goods or the right to possession and
use of the goods is a condition to effectiveness of the lease contract;

(III) The lessee, before signing the
lease contract, receives an accurate and complete statement designating the
promises and warranties, and any disclaimers of warranties, limitations or modifications
of remedies, or liquidated damages, including those of a third party, such as
the manufacturer of the goods, provided to the lessor by the person supplying
the goods in connection with or as part of the contract by which the lessor
acquired the goods or the right to possession and use of the goods; or

(IV) If the lease is not a consumer
lease, the lessor, before the lessee signs the lease contract, informs the
lessee in writing of the identity of the person supplying the goods to the
lessor, unless the lessee has selected that person and directed the lessor to
acquire the goods or the right to possession and use of the goods from that
person, that the lessee is entitled under this Article to the promises and
warranties, including those of any third party, provided to the lessor by the
person supplying the goods in connection with or as part of the contract by
which the lessor acquired the goods or the right to possession and use of the
goods, and that the lessee may communicate with the person supplying the goods
to the lessor and receive an accurate and complete statement of those promises
and warranties, including any disclaimers and limitations of them or of
remedies.

(h) “Goods” means all things that are movable at
the time of identification to the lease contract, or are fixtures (NRS 104A.2309), but the term does not include money,
documents, instruments, accounts, chattel paper, general intangibles, or
minerals or the like, including oil and gas, before extraction. The term also
includes the unborn young of animals.

(i) “Installment lease contract” means a lease
contract that authorizes or requires the delivery of goods in separate lots to
be separately accepted, even though the lease contract contains a clause “each
delivery is a separate lease” or its equivalent.

(j) “Lease” means a transfer of the right to
possession and use of goods for a term in return for consideration, but a sale,
including a sale on approval or a sale or return, or retention or creation of a
security interest is not a lease. Unless the context clearly indicates
otherwise, the term includes a sublease.

(k) “Lease agreement” means the bargain, with
respect to the lease, of the lessor and the lessee in fact as found in their
language or by implication from other circumstances including course of dealing
or usage of trade or course of performance as provided in this Article. Unless
the context clearly indicates otherwise, the term includes a sublease
agreement.

(l) “Lease contract” means the total legal
obligation that results from the lease agreement as affected by this Article
and any other applicable rules of law. Unless the context clearly indicates
otherwise, the term includes a sublease contract.

(m) “Leasehold interest” means the interest of
the lessor or the lessee under a lease contract.

(n) “Lessee” means a person who acquires the
right to possession and use of goods under a lease. Unless the context clearly
indicates otherwise, the term includes a sublessee.

(o) “Lessee in ordinary course of business” means
a person who in good faith and without knowledge that the lease to him or her
is in violation of the ownership rights or security interest or leasehold
interest of a third party in the goods leases in ordinary course from a person
in the business of selling or leasing goods of that kind but does not include a
pawnbroker. “Leasing” may be for cash or by exchange of other property or on
secured or unsecured credit and includes acquiring goods or documents of title
under a preexisting lease contract but does not include a transfer in bulk or
as security for or in total or partial satisfaction of a money debt.

(p) “Lessor” means a person who transfers the
right to possession and use of goods under a lease. Unless the context clearly
indicates otherwise, the term includes a sublessor.

(q) “Lessor’s residual interest” means the
lessor’s interest in the goods after expiration, termination or cancellation of
the lease contract.

(r) “Lien” means a charge against or interest in
goods to secure payment of a debt or performance of an obligation, but the term
does not include a security interest.

(s) “Lot” means a parcel or a single Article that
is the subject matter of a separate lease or delivery, whether or not it is
sufficient to perform the lease contract.

(t) “Merchant lessee” means a lessee that is a
merchant with respect to goods of the kind subject to the lease.

(u) “Present value” means the amount as of a date
certain of one or more sums payable in the future, discounted to the date
certain. The discount is determined by the interest rate specified by the
parties if the rate was not manifestly unreasonable at the time the transaction
was entered into; otherwise, the discount is determined by a commercially
reasonable rate that takes into account the facts and circumstances of each
case at the time the transaction was entered into.

(v) “Purchase” includes taking by sale, lease,
mortgage, security interest, pledge, gift or any other voluntary transaction
creating an interest in goods.

(w) “Sublease” means a lease of goods the right
to possession and use of which was acquired by the lessor as a lessee under an
existing lease.

(x) “Supplier” means a person from whom a lessor
buys or leases goods to be leased under a finance lease.

(y) “Supply contract” means a contract under
which a lessor buys or leases goods to be leased.

(z) “Termination” occurs when either party
pursuant to a power created by agreement or law puts an end to the lease
contract otherwise than for default.

2. Other definitions applying to this
Article and the sections in which they appear are:

1. A lease, although subject to this
Article, is also subject to any applicable:

(a) Certificate of title statute of this State,
including any applicable provision of chapters
482, 488, 489
and 490 of NRS;

(b) Certificate of title statute of another
jurisdiction (NRS 104A.2105); or

(c) Consumer protection statute of this State,
including any applicable provision of NRS
97.297, 97.299, 97.301 and 100.095 to 100.175, inclusive, and a final decision
of a court of this State concerning the protection of consumers rendered before
January 1, 1990.

2. In case of conflict between this
Article, other than NRS 104A.2105, subsection 3
of NRS 104A.2304 and subsection 3 of NRS 104A.2305, and a statute or decision referred to
in subsection 1, the statute or decision controls.

3. Failure to comply with an applicable
law has only the effect specified therein.

NRS 104A.2105Territorial application of article to goods covered by
certificate of title.Subject to
the provisions of subsection 3 of NRS 104A.2304
and subsection 3 of NRS 104A.2305, with respect
to goods covered by a certificate of title issued under a statute of this State
or of another jurisdiction, compliance and the effect of compliance or
noncompliance with a certificate of title statute are governed by the law
(including the conflict of laws rules) of the jurisdiction issuing the
certificate until the earlier of:

1. Surrender of the certificate; or

2. Four months after the goods are removed
from that jurisdiction,

Ê and
thereafter until a new certificate of title is issued by another jurisdiction.

NRS 104A.2106Limitation on power of parties to consumer lease to choose
applicable law and judicial forum.

1. If the law chosen by the parties to a
consumer lease is that of a jurisdiction other than a jurisdiction in which the
lessee resides at the time the lease agreement becomes enforceable or within 30
days thereafter or in which the goods are to be used, the choice is not
enforceable.

2. If the judicial forum chosen by the
parties to a consumer lease is a forum that would not otherwise have
jurisdiction over the lessee, the choice is not enforceable.

NRS 104A.2107Waiver or renunciation of claim or right after default.Any claim or right arising out of an alleged
default or breach of warranty may be discharged in whole or in part without
consideration by a written waiver or renunciation signed and delivered by the
aggrieved party.

1. If the court as a matter of law finds a
lease contract or any clause of a lease contract to have been unconscionable at
the time it was made the court may refuse to enforce the lease contract, or it
may enforce the remainder of the lease contract without the unconscionable
clause, or it may so limit the application of any unconscionable clause as to
avoid any unconscionable result.

2. With respect to a consumer lease, if
the court as a matter of law finds that a lease contract or any clause of a
lease contract has been induced by unconscionable conduct or that
unconscionable conduct has occurred in the collection of a claim arising from a
lease contract, the court may grant appropriate relief.

3. Before making a finding of
unconscionability under subsection 1 or 2, the court, on its own motion or that
of a party, shall afford the parties a reasonable opportunity to present
evidence as to the setting, purpose and effect of the lease contract or a
clause thereof, or of the conduct.

4. In an action in which the lessee claims
unconscionability with respect to a consumer lease:

(a) If the court finds unconscionability under
subsection 1 or 2, the court shall award reasonable attorney’s fees to the
lessee.

(b) If the court does not find unconscionability
and the lessee claiming unconscionability has brought or maintained an action
the lessee knew to be groundless, the court shall award reasonable attorney’s
fees to the party against whom the claim is made.

(c) In determining attorney’s fees, the amount of
the recovery on behalf of the claimant under subsections 1 and 2 is not
controlling.

1. A term providing that one party or his
or her successor in interest may accelerate payment or performance or require
collateral or additional collateral “at will” or “when he or she deems himself
or herself insecure” or in words of similar import must be construed to mean
that he or she has power to do so only if he or she in good faith believes that
the prospect of payment or performance is impaired.

2. With respect to a consumer lease, the
burden of establishing good faith under subsection 1 is on the party who
exercised the power; otherwise the burden of establishing lack of good faith is
on the party against whom the power has been exercised.

1. A lease contract is not enforceable by
way of action or defense unless:

(a) The total payments to be made under the lease
contract, excluding payments for options to renew or buy, are less than $1,000;
or

(b) There is a writing, signed by the party
against whom enforcement is sought or by that party’s authorized agent,
sufficient to indicate that a lease contract has been made between the parties
and to describe the goods leased and the lease term.

2. Any description of leased goods or of
the lease term is sufficient and satisfies paragraph (b) of subsection 1,
whether or not it is specific, if it reasonably identifies what is described.

3. A writing is not insufficient because
it omits or incorrectly states a term agreed upon, but the lease contract is
not enforceable under paragraph (b) of subsection 1 beyond the lease term and
the quantity of goods shown in the writing.

4. A lease contract that does not satisfy
the requirements of subsection 1, but which is valid in other respects, is
enforceable:

(a) If the goods are to be specially manufactured
or obtained for the lessee and are not suitable for lease or sale to others in
the ordinary course of the lessor’s business, and the lessor, before notice of
repudiation is received and under circumstances that reasonably indicate that
the goods are for the lessee, has made either a substantial beginning of their
manufacture or commitments for their procurement;

(b) If the party against whom enforcement is
sought admits in that party’s pleading, testimony or otherwise in court that a
lease contract was made, but the lease contract is not enforceable under this
provision beyond the quantity of goods admitted; or

(c) With respect to goods that have been received
and accepted by the lessee.

5. The lease term under a lease contract
referred to in subsection 4 is:

(a) If there is a writing signed by the party
against whom enforcement is sought or by that party’s authorized agent
specifying the lease term, the term so specified;

(b) If the party against whom enforcement is
sought admits in that party’s pleading, testimony or otherwise in court a lease
term, the term so admitted; or

NRS 104A.2202Final written expression: Parol or extrinsic evidence.Terms with respect to which the confirmatory
memoranda of the parties agree or which are otherwise set forth in a writing
intended by the parties as a final expression of their agreement with respect
to such terms as are included therein may not be contradicted by evidence of
any prior agreement or of a contemporaneous oral agreement but may be explained
or supplemented:

1. By course of dealing or usage of trade
or by course of performance; and

2. By evidence of consistent additional
terms,

Ê unless the
court finds the writing to have been intended also as a complete and exclusive
statement of the terms of the agreement.

NRS 104A.2203Seals inoperative.The
affixing of a seal to a writing evidencing a lease contract or an offer to
enter into a lease contract does not render the writing a sealed instrument and
the law with respect to sealed instruments does not apply to the lease contract
or offer.

1. A lease contract may be made in any
manner sufficient to show agreement, including conduct by both parties which
recognizes the existence of a lease contract.

2. An agreement sufficient to constitute a
lease contract may be found although the moment of its making is undetermined.

3. Although one or more terms are left
open, a lease contract does not fail for indefiniteness if the parties have
intended to make a lease contract and there is a reasonably certain basis for
giving an appropriate remedy.

NRS 104A.2205Firm offers.An
offer by a merchant to lease goods to or from another person in a signed
writing that by its terms gives assurance it will be held open is not
revocable, for lack of consideration, during the time stated or, if no time is
stated, for a reasonable time, but in no event may the period of irrevocability
exceed 3 months. Any such term of assurance on a form supplied by the offeree
must be separately signed by the offeror.

1. Unless otherwise unambiguously
indicated by the language or circumstances, an offer to make a lease contract
must be construed as inviting acceptance in any manner and by any medium reasonable
in the circumstances.

2. If the beginning of a requested
performance is a reasonable mode of acceptance, an offeror who is not notified
of acceptance within a reasonable time may treat the offer as having lapsed
before acceptance.

1. An agreement modifying a lease contract
needs no consideration to be binding.

2. A signed lease agreement that excludes
modification or rescission except by a signed writing may not be otherwise
modified or rescinded, but, except as between merchants, such a requirement on
a form supplied by a merchant must be separately signed by the other party.

3. Although an attempt at modification or
rescission does not satisfy the requirements of subsection 2, it may operate as
a waiver.

4. A party who has made a waiver affecting
an executory portion of a lease contract may retract the waiver by reasonable
notification received by the other party that strict performance will be
required of any term waived, unless the retraction would be unjust in view of a
material change of position in reliance on the waiver.

NRS 104A.2209Lessee under finance lease as beneficiary of supply contract.

1. The benefit of the supplier’s promises
to the lessor under the supply contract and of all warranties, whether express
or implied, including those of any third party provided in connection with or
as part of the supply contract, extends to the lessee to the extent of the
lessee’s leasehold interest under a finance lease related to the supply
contract, but subject to the terms of the warranty and of the supply contract
and all defenses or claims arising therefrom.

2. The extension of the benefit of a
supplier’s promises and of warranties to the lessee (subsection 1) does not:

(a) Modify the rights and obligations of the
parties to the supply contract, whether arising therefrom or otherwise; or

(b) Impose any duty or liability under the supply
contract on the lessee.

3. Any modification or rescission of the
supply contract by the supplier and the lessor is effective between the
supplier and the lessee unless, before the modification or rescission, the
supplier has received notice that the lessee has entered into a finance lease
related to the supply contract. If the modification or rescission is effective
between the supplier and the lessee, the lessor is deemed to have assumed, in
addition to his or her obligations to the lessee under the lease contract,
promises of the supplier to the lessor and warranties that were so modified or
rescinded as they existed and were available to the lessee before modification
or rescission.

4. In addition to the extension of the
benefit of the supplier’s promises and of warranties to the lessee under
subsection 1, the lessee retains all rights that the lessee may have against
the supplier which arise from an agreement between the lessee and the supplier
or under other law.

(a) Any affirmation of fact or promise made by
the lessor to the lessee which relates to the goods and becomes part of the
basis of the bargain creates an express warranty that the goods will conform to
the affirmation or promise.

(b) Any description of the goods which is made
part of the basis of the bargain creates an express warranty that the goods
will conform to the description.

(c) Any sample or model that is made part of the
basis of the bargain creates an express warranty that the whole of the goods
will conform to the sample or model.

2. It is not necessary to the creation of
an express warranty that the lessor use formal words, such as “warrant” or “guarantee,”
or that the lessor have a specific intention to make a warranty, but an
affirmation merely of the value of the goods or a statement purporting to be
merely the lessor’s opinion or commendation of the goods does not create a
warranty.

NRS 104A.2211Warranties against interference and against infringement;
lessee’s obligation against infringement.

1. There is in a lease contract a warranty
that for the lease term no person holds a claim to or interest in the goods
that arose from an act or omission of the lessor, other than a claim by way of
infringement or the like, which will interfere with the lessee’s enjoyment of
its leasehold interest.

2. Except in a finance lease there is in a
lease contract by a lessor who is a merchant regularly dealing in goods of the
kind a warranty that the goods are delivered free of the rightful claim of any
person by way of infringement or the like.

3. A lessee who furnishes specifications
to a lessor or a supplier shall hold the lessor and the supplier harmless
against any claim by way of infringement or the like that arises out of
compliance with the specifications.

NRS 104A.2213Implied warranty of fitness for particular purpose.Except in a finance lease, if the lessor at
the time the lease contract is made has reason to know of any particular
purpose for which the goods are required and that the lessee is relying on the
lessor’s skill or judgment to select or furnish suitable goods, there is in the
lease contract an implied warranty that the goods will be fit for that purpose.

1. Words or conduct relevant to the
creation of an express warranty and words or conduct tending to negate or limit
a warranty must be construed wherever reasonable as consistent with each other;
but, subject to the provisions of NRS 104A.2202
on parol or extrinsic evidence, negation or limitation is inoperative to the
extent that the construction is unreasonable.

2. Subject to subsection 3, to exclude or
modify the implied warranty of merchantability or any part of it the language
must mention “merchantability,” be by a writing and be conspicuous. Subject to
subsection 3, to exclude or modify any implied warranty of fitness the exclusion
must be by a writing and be conspicuous. Language to exclude all implied
warranties of fitness is sufficient if it is in writing, is conspicuous and
states, for example, “There is no warranty that the goods will be fit for a
particular purpose.”

3. Notwithstanding subsection 2, but
subject to subsection 4:

(a) Unless the circumstances indicate otherwise,
all implied warranties are excluded by expressions like “as is,” or “with all
faults,” or by other language that in common understanding calls the lessee’s
attention to the exclusion of warranties and makes plain that there is no
implied warranty, if in writing and conspicuous;

(b) If the lessee before entering into the lease
contract has examined the goods or the sample or model as fully as desired or
has refused to examine the goods, there is no implied warranty with regard to
defects that an examination ought in the circumstances to have revealed; and

(c) An implied warranty may also be excluded or
modified by course of dealing, course of performance or usage of trade.

4. To exclude or modify a warranty against
interference or against infringement (NRS 104A.2211)
or any part of it, the language must be specific, be by a writing and be
conspicuous, unless the circumstances, including course of performance, course
of dealing or usage of trade, give the lessee reason to know that the goods are
being leased subject to a claim or interest of any person.

NRS 104A.2215Cumulation and conflict of warranties express or implied.Warranties, whether express or implied, must
be construed as consistent with each other and as cumulative, but if that
construction is unreasonable, the intention of the parties determines which
warranty is dominant. In ascertaining that intention the following rules apply:

1. Exact or technical specifications
displace an inconsistent sample or model or general language of description.

2. A sample from an existing bulk
displaces inconsistent general language of description.

3. Express warranties displace
inconsistent implied warranties other than an implied warranty of fitness for a
particular purpose.

NRS 104A.2216Third-party beneficiaries of express and implied warranties.A warranty to or for the benefit of a lessee
under this article, whether express or implied, extends to any natural person
who is in the family or household of the lessee or who is a guest in the
lessee’s home if it is reasonable to expect that such person may use, consume
or be affected by the goods and who is injured in person by breach of the
warranty. This section does not displace principles of law and equity that
extend a warranty to or for the benefit of a lessee to other persons. The
operation of this section may not be excluded, modified or limited, but an
exclusion, modification or limitation of the warranty, including any with
respect to rights and remedies, effective against the lessee is also effective
against any beneficiary designated under this section.

NRS 104A.2217Identification.Identification
of goods as goods to which a lease contract refers may be made at any time and
in any manner explicitly agreed to by the parties. In the absence of explicit
agreement, identification occurs:

1. When the lease contract is made if the
lease contract is for a lease of goods that are existing and identified;

2. When the goods are shipped, marked or
otherwise designated by the lessor as goods to which the lease contract refers,
if the lease contract is for a lease of goods that are not existing and
identified; or

3. When the young are conceived, if the
lease contract is for a lease of unborn young of animals.

1. A lessee obtains an insurable interest
when existing goods are identified to the lease contract even though the goods
identified are nonconforming and the lessee has an option to reject them.

2. If a lessee has an insurable interest
only by reason of the lessor’s identification of the goods, the lessor, until
default or insolvency or notification to the lessee that identification is
final, may substitute other goods for those identified.

3. Notwithstanding a lessee’s insurable
interest under subsections 1 and 2, the lessor retains an insurable interest
until an option to buy has been exercised by the lessee and risk of loss has
passed to the lessee.

4. Nothing in this section impairs any
insurable interest recognized under any other statute or rule of law.

5. The parties by agreement may determine
that one or more parties have an obligation to obtain and pay for insurance
covering the goods and by agreement may determine the beneficiary of the
proceeds of the insurance.

1. Except in the case of a finance lease,
risk of loss is retained by the lessor and does not pass to the lessee. In the
case of a finance lease, risk of loss passes to the lessee.

2. Subject to the provisions of this
Article on the effect of default on risk of loss (NRS
104A.2220), if risk of loss is to pass to the lessee and the time of
passage is not stated, the following rules apply:

(a) If the lease contract requires or authorizes
the goods to be shipped by carrier and it does not require delivery at a
particular destination, the risk of loss passes to the lessee when the goods
are duly delivered to the carrier, but if it does require delivery at a particular
destination and the goods are there duly tendered while in the possession of
the carrier, the risk of loss passes to the lessee when the goods are there
duly so tendered as to enable the lessee to take delivery.

(b) If the goods are held by a bailee to be
delivered without being moved, the risk of loss passes to the lessee on
acknowledgment by the bailee of the lessee’s right to possession of the goods.

(c) In any case not within paragraph (a) or (b),
the risk of loss passes to the lessee on the lessee’s receipt of the goods if
the lessor, or, in the case of a finance lease, the supplier, is a merchant;
otherwise the risk passes to the lessee on tender of delivery.

1. Where risk of loss is to pass to the
lessee and the time of passage is not stated:

(a) If a tender or delivery of goods so fails to
conform to the lease contract as to give a right of rejection, the risk of
their loss remains with the lessor, or, in the case of a finance lease, the
supplier, until cure or acceptance.

(b) If the lessee rightfully revokes acceptance,
the lessee, to the extent of any deficiency in his or her effective insurance
coverage, may treat the risk of loss as having remained with the lessor from
the beginning.

2. Whether or not risk of loss is to pass
to the lessee, if the lessee as to conforming goods already identified to a
lease contract repudiates or is otherwise in default under the lease contract,
the lessor, or, in the case of a finance lease, the supplier, to the extent of
any deficiency in his or her effective insurance coverage may treat the risk of
loss as resting on the lessee for a commercially reasonable time.

NRS 104A.2221Casualty to identified goods.If
a lease contract requires goods identified when the lease contract is made, and
the goods suffer casualty without fault of the lessee, the lessor or the
supplier before delivery, or the goods suffer casualty before risk of loss
passes to the lessee pursuant to the lease agreement or NRS 104A.2219, then:

1. If the loss is total, the lease
contract is avoided; and

2. If the loss is partial or the goods
have so deteriorated as to no longer conform to the lease contract, the lessee
may nevertheless demand inspection and at his or her option either treat the
lease contract as avoided or, except in a finance lease that is not a consumer
lease, accept the goods with due allowance from the rent payable for the
balance of the lease term for the deterioration or the deficiency in quantity
but without further right against the lessor.

NRS 104A.2301Enforceability of lease contract.Except
as otherwise provided in this article, a lease contract is effective and
enforceable according to its terms between the parties, against purchasers of
the goods and against creditors of the parties.

NRS 104A.2302Title to and possession of goods.Except
as otherwise provided in this article, each provision of this article applies
whether the lessor or a third party has title to the goods, and whether the
lessor, the lessee or a third party has possession of the goods,
notwithstanding any statute or rule of law that possession or the absence of
possession is fraudulent.

NRS 104A.2303Alienability of party’s interest under lease contract or of
lessor’s residual interest in goods; delegation of performance; transfer of
rights.

1. As used in this section, “creation of a
security interest” includes the sale of a lease contract that is subject to
Article 9, Secured Transactions, by reason of paragraph (c) of subsection 1 of NRS 104.9109.

2. Except as otherwise provided in
subsection 3 and NRS 104.9407, a
provision in a lease agreement which:

(a) Prohibits the voluntary or involuntary
transfer, including a transfer by sale, sublease, creation or enforcement of a
security interest, or attachment, levy, or other judicial process, of an
interest of a party under the lease contract or of the lessor’s residual
interest in the goods; or

(b) Makes such a transfer an event of default,

Ê gives rise
to the rights and remedies provided in subsection 4, but a transfer that is
prohibited or is an event of default under the lease agreement is otherwise
effective.

3. A provision in a lease agreement which
prohibits a transfer of a right to damages for default with respect to the
whole lease contract or of a right to payment arising out of the transferor’s
due performance of his or her entire obligation, or makes such a transfer an
event of default, is not enforceable, and such a transfer is not a transfer
that materially impairs the prospect of obtaining return performance by,
materially changes the duty of, or materially increases the burden or risk
imposed on, the other party to the lease contract within the purview of
subsection 4.

(a) If a transfer is made which is made an event
of default under a lease agreement, the party to the lease contract not making
the transfer, unless that party waives the default or otherwise agrees, has the
rights and remedies described in subsection 2 of NRS
104A.2501.

(b) If paragraph (a) is not applicable and if a
transfer is made that is prohibited under a lease agreement or materially
impairs the prospect of obtaining return performance by, materially changes the
duty of, or materially increases the burden or risk imposed on, the other party
to the lease contract, unless the party not making the transfer agrees at any
time to the transfer in the lease contract or otherwise, then, except as
limited by contract, the transferor is liable to the party not making the
transfer for damages caused by the transfer to the extent that the damages
could not reasonably be prevented by the party not making the transfer and a
court having jurisdiction may grant other appropriate relief, including
cancellation of the lease contract or an injunction against the transfer.

5. A transfer of “the lease” or of “all my
rights under the lease,” or a transfer in similar general terms, is a transfer
of rights, and, unless the language or the circumstances, as in a transfer for
security, indicate the contrary, the transfer is a delegation of duties by the
transferor to the transferee. Acceptance by the transferee constitutes a
promise by the transferee to perform those duties. The promise is enforceable
by either the transferor or the other party to the lease contract.

6. Unless otherwise agreed by the lessor
and the lessee, a delegation of performance does not relieve the transferor as
against the other party of any duty to perform or of any liability for default.

7. In a consumer lease, to prohibit the
transfer of an interest of a party under the lease contract or to make a
transfer an event of default, the language must be specific, by a writing, and
conspicuous.

1. Subject to the provisions of NRS 104A.2303, a subsequent lessee from a lessor of
goods under an existing lease contract obtains, to the extent of the lease-hold
interest transferred, the leasehold interest in the goods that the lessor had
or had power to transfer, and except as provided in subsection 2 of this
section and subsection 4 of NRS 104A.2527, takes
subject to the existing lease contract. A lessor with voidable title has power
to transfer a good leasehold interest to a good faith subsequent lessee for
value, but only to the extent set forth in the preceding sentence. When goods
have been delivered under a transaction of purchase the lessor has that power
even though:

(a) The lessor’s transferor was deceived as to
the identity of the lessor;

(b) The delivery was in exchange for a check
which is later dishonored;

(c) It was agreed that the transaction was to be
a “cash sale;” or

(d) The delivery was procured through fraud
punishable as larcenous under the criminal law.

2. A subsequent lessee in the ordinary
course of business from a lessor who is a merchant dealing in goods of that
kind to whom the goods were entrusted by the existing lessee from that lessor
before the interest of the subsequent lessee became enforceable against the
lessor obtains, to the extent of the leasehold interest transferred, all of the
lessor’s and the existing lessee’s rights to the goods, and takes free of the
existing lease contract.

3. A subsequent lessee from the lessor of
goods that are subject to an existing lease contract and are covered by a
certificate of title issued under a statute of this State or of another
jurisdiction takes no greater rights than those provided both by this section
and by the certificate of title statute.

1. Subject to the provisions of NRS 104A.2303, a buyer or sublessee from the lessee
of goods under an existing lease contract obtains, to the extent of the
interest transferred, the leasehold interest in the goods that the lessee had
or had power to transfer, and except as provided in subsection 2 of this
section and subsection 4 of NRS 104A.2511, takes
subject to the existing lease contract. A lessee with a voidable leasehold
interest has power to transfer a good leasehold interest to a good faith buyer
for value or a good faith sublessee for value, but only to the extent set forth
in the preceding sentence. When goods have been delivered under a transaction
of lease the lessee has that power even though:

(a) The lessor was deceived as to the identity of
the lessee;

(b) The delivery was in exchange for a check
which is later dishonored; or

(c) The delivery was procured through fraud
punishable as larcenous under the criminal law.

2. A buyer in the ordinary course of
business or a sublessee in the ordinary course of business from a lessee who is
a merchant dealing in goods of that kind to whom the goods were entrusted by
the lessor obtains, to the extent of the interest transferred, all of the
lessor’s and lessee’s rights to the goods, and takes free of the existing lease
contract.

3. A buyer or sublessee from the lessee of
goods that are subject to an existing lease contract and are covered by a
certificate of title issued under a statute of this State or of another
jurisdiction takes no greater rights than those provided both by this section
and by the certificate of title statute.

NRS 104A.2306Priority of certain liens arising by operation of law.If a person in the ordinary course of his or
her business furnishes services or materials with respect to goods subject to a
lease contract, a lien upon those goods in the possession of that person given
by statute or rule of law for those materials or services takes priority over
any interest of the lessor or lessee under the lease contract or this Article
unless the lien is created by statute and the statute provides otherwise or
unless the lien is created by a rule of law and the rule of law provides
otherwise.

NRS 104A.2307Priority of liens arising by attachment or levy on, security
interests in and other claims to goods.

1. Except as otherwise provided in NRS 104A.2306, a creditor of a lessee takes subject
to the lease contract.

2. Except as otherwise provided in
subsection 3 and in NRS 104A.2306 and 104A.2308, a creditor of a lessor takes subject to
the lease contract unless the creditor holds a lien that attached to the goods
before the lease contract became enforceable.

3. Except as otherwise provided in NRS 104.9317, 104.9321 and 104.9323, a lessee takes a leasehold
subject to a security interest held by a creditor of the lessor.

1. A creditor of a lessor in possession of
goods subject to a lease contract may treat the lease contract as void if as
against the creditor retention of possession by the lessor is fraudulent under
any statute or rule of law, but retention of possession in good faith and
current course of trade by the lessor for a commercially reasonable time after
the lease contract becomes enforceable is not fraudulent.

2. Nothing in this article impairs the
rights of creditors of a lessor if the lease contract:

(a) Becomes enforceable, not in current course of
trade but in satisfaction of or as security for a preexisting claim for money,
security or the like; and

(b) Is made under circumstances which under any
statute or rule of law apart from this article would constitute the transaction
a fraudulent transfer or voidable preference.

3. A creditor of a seller may treat a sale
or an identification of goods to a contract for sale as void if as against the
creditor retention of possession by the seller is fraudulent under any statute
or rule of law, but retention of possession of the goods pursuant to a lease
contract entered into by the seller as lessee and the buyer as lessor in
connection with the sale or identification of the goods is not fraudulent if
the buyer bought for value and in good faith.

(a) Goods are “fixtures” when they become so
related to particular real estate that an interest in them arises under real
estate law;

(b) A “fixture filing” is the filing, in the
office where a mortgage on the real estate would be filed or recorded, of a
financing statement covering goods that are or are to become fixtures and
conforming to the requirements of subsections 1 and 2 of NRS 104.9502;

(c) A lease is a “purchase money lease” unless
the lessee has possession or use of the goods or the right to possession or use
of the goods before the lease agreement is enforceable;

(d) A mortgage is a “construction mortgage” to
the extent it secures an obligation incurred for the construction of an
improvement on land including the acquisition cost of the land, if the recorded
writing so indicates; and

(e) “Encumbrance” includes real estate mortgages
and other liens on real estate and all other rights in real estate that are not
ownership interests.

2. Under this Article a lease may be of
goods that are fixtures or may continue in goods that become fixtures, but no
lease exists under this Article of ordinary building materials incorporated
into an improvement on land.

3. This Article does not prevent creation
of a lease of fixtures pursuant to real estate law.

4. The perfected interest of a lessor of
fixtures has priority over a conflicting interest of an encumbrancer or owner
of the real estate if:

(a) The lease is a purchase money lease, the
conflicting interest of the encumbrancer or owner arises before the goods
become fixtures, the interest of the lessor is perfected by a fixture filing
before the goods become fixtures or within 10 days thereafter, and the lessee
has an interest of record in the real estate or is in possession of the real
estate; or

(b) The interest of the lessor is perfected by a
fixture filing before the interest of the encumbrancer or owner is of record,
the lessor’s interest has priority over any conflicting interest of a
predecessor in title of the encumbrancer or owner, and the lessee has an
interest of record in the real estate or is in possession of the real estate.

5. The interest of a lessor of fixtures,
whether or not perfected, has priority over the conflicting interest of an
encumbrancer or owner of the real estate if:

(a) The fixtures are readily removable factory or
office machines, readily removable equipment that is not primarily used or
leased for use in the operation of the real estate, or readily removable
replacements of domestic appliances that are goods subject to a consumer lease,
and before the goods become fixtures the lease contract is enforceable;

(b) The conflicting interest is a lien on the
real estate obtained by legal or equitable proceedings after the lease contract
is enforceable;

(c) The encumbrancer or owner has consented in
writing to the lease or has disclaimed an interest in the goods as fixtures; or

(d) The lessee has a right to remove the goods as
against the encumbrancer or owner. If the lessee’s right to remove terminates,
the priority of the interest of the lessor continues for a reasonable time.

6. Notwithstanding paragraph (a) of
subsection 4 but otherwise subject to subsections 4 and 5, the interest of a
lessor of fixtures, including the lessor’s residual interest, is subordinate to
the conflicting interest of an encumbrancer of the real estate under a
construction mortgage recorded before the goods become fixtures if the goods
become fixtures before the completion of the construction. To the extent given
to refinance a construction mortgage, the conflicting interest of an
encumbrancer of the real estate under a mortgage has this priority to the same
extent as the encumbrancer of the real estate under the construction mortgage.

7. In cases not within the preceding
subsections, priority between the interest of a lessor of fixtures, including
the lessor’s residual interest, and the conflicting interest of an encumbrancer
or owner of the real estate who is not the lessee is determined by the priority
rules governing conflicting interests in real estate.

8. If the interest of a lessor of
fixtures, including the lessor’s residual interest, has priority over all
conflicting interests of all owners and encumbrancers of the real estate, the
lessor or the lessee may:

(a) On default, expiration, termination or
cancellation of the lease agreement but subject to the lease agreement and this
Article; or

(b) If necessary to enforce his or her other
rights and remedies under this Article,

Ê remove the
goods from the real estate, free and clear of all conflicting interests of all
owners and encumbrancers of the real estate, but he or she must reimburse any
encumbrancer or owner of the real estate who is not the lessee and who has not
otherwise agreed for the cost of repair of any physical injury, but not for any
diminution in value of the real estate caused by the absence of the goods
removed or by any necessity of replacing them. A person entitled to
reimbursement may refuse permission to remove until the party seeking removal
gives adequate security for the performance of this obligation.

9. Even though the lease agreement does
not create a security interest, the interest of a lessor of fixtures, including
the lessor’s residual interest, is perfected by filing a financing statement as
a fixture filing for leased goods that are or are to become fixtures in
accordance with the relevant provisions of Article 9 on secured transactions.

NRS 104A.2310Lessor’s and lessee’s rights when goods become accessions.

1. Goods are “accessions” when they are
installed in or affixed to other goods.

2. The interest of a lessor or a lessee
under a lease contract entered into before the goods became accessions is
superior to all interests in the whole except as stated in subsection 4.

3. The interest of a lessor or a lessee
under a lease contract entered into at the time or after the goods became
accessions is superior to all subsequently acquired interests in the whole
except as stated in subsection 4 but is subordinate to interests in the whole
existing at the time the lease contract was made unless the holders of such
interests in the whole have in writing consented to the lease or disclaimed an interest
in the goods as part of the whole.

4. The interest of a lessor or a lessee
under a lease contract described in subsection 2 or 3 is subordinate to the
interest of:

(a) A buyer in the ordinary course of business or
a lessee in the ordinary course of business of any interest in the whole acquired
after the goods became accessions; or

(b) A creditor with a security interest in the
whole perfected before the lease contract was made to the extent that the
creditor makes subsequent advances without knowledge of the lease contract.

5. When under subsections 2 or 3 and 4 a
lessor or a lessee of accessions holds an interest that is superior to all
interests in the whole, the lessor or the lessee may:

(a) On default, expiration, termination or
cancellation of the lease contract by the other party but subject to the
provisions of the lease contract and this Article; or

(b) If necessary to enforce his or her other
rights and remedies under this Article,

Ê remove the
goods from the whole, free and clear of all interests in the whole, but he or
she must reimburse any holder of an interest in the whole who is not the lessee
and who has not otherwise agreed for the cost of repair of any physical injury
but not for any diminution in value of the whole caused by the absence of the
goods removed or by any necessity for replacing them. A person entitled to
reimbursement may refuse permission to remove until the party seeking removal
gives adequate security for the performance of this obligation.

1. A lease contract imposes an obligation
on each party that the other’s expectation of receiving due performance will
not be impaired.

2. If reasonable grounds for insecurity
arise with respect to the performance of either party, the insecure party may
demand in writing adequate assurance of due performance. Until the insecure
party receives that assurance, if commercially reasonable the insecure party
may suspend any performance for which the insecure party has not already
received the agreed return.

3. A repudiation of the lease contract
occurs if assurance of due performance adequate under the circumstances of the
particular case is not provided to the insecure party within a reasonable time,
not to exceed 30 days after receipt of a demand by the other party.

4. Between merchants, the reasonableness
of grounds for insecurity and the adequacy of any assurance offered must be
determined according to commercial standards.

5. Acceptance of any nonconforming
delivery or payment does not prejudice the aggrieved party’s right to demand
adequate assurance of future performance.

NRS 104A.2402Anticipatory repudiation.If
either party repudiates a lease contract with respect to a performance not yet
due under the lease contract, the loss of which performance will substantially
impair the value of the lease contract to the other, the aggrieved party may:

1. For a commercially reasonable time,
await retraction of repudiation and performance by the repudiating party;

2. Make demand pursuant to NRS 104A.2401 and await assurance of future
performance adequate under the circumstances of the particular case; or

3. Resort to any right or remedy upon
default under the lease contract or this Article, even though the aggrieved
party has notified the repudiating party that the aggrieved party would await
the repudiating party’s performance and assurance and has urged retraction.

Ê In addition,
whether or not the aggrieved party is pursuing one of the foregoing remedies,
the aggrieved party may suspend performance or, if the aggrieved party is the
lessor, proceed in accordance with the provisions of this Article on the
lessor’s right to identify goods to the lease contract notwithstanding default
or to salvage unfinished goods (NRS 104A.2524).

1. Until the repudiating party’s next
performance is due, the repudiating party can retract the repudiation unless,
since the repudiation, the aggrieved party has cancelled the lease contract or
materially changed the aggrieved party’s position or otherwise indicated that
the aggrieved party considers the repudiation final.

2. Retraction may be by any method that
clearly indicates to the aggrieved party that the repudiating party intends to
perform under the lease contract and includes any assurance demanded under NRS 104A.2401.

3. Retraction reinstates a repudiating
party’s rights under a lease contract with due excuse and allowance to the
aggrieved party for any delay occasioned by the repudiation.

1. If without fault of the lessee, the
lessor and the supplier, the agreed berthing, loading or unloading facilities
fail or the agreed type of carrier becomes unavailable or the agreed manner of
delivery otherwise becomes commercially impracticable, but a commercially
reasonable substitute is available, the substitute performance must be tendered
and accepted.

2. If the agreed means or manner of
payment fails because of domestic or foreign governmental regulation:

(a) The lessor may withhold or stop delivery or
cause the supplier to withhold or stop delivery unless the lessee provides a
means or manner of payment that is commercially a substantial equivalent; and

(b) If delivery has already been taken, payment
by the means or in the manner provided by the regulation discharges the
lessee’s obligation unless the regulation is discriminatory, oppressive or
predatory.

NRS 104A.2405Excused performance.Subject
to NRS 104A.2404 on substituted performance, the
following rules apply:

1. Delay in delivery or nondelivery in
whole or in part by a lessor or a supplier who complies with subsections 2 and
3 is not a default under the lease contract if performance as agreed has been
made impracticable by the occurrence of a contingency the nonoccurrence of
which was a basic assumption on which the lease contract was made or by
compliance in good faith with any applicable foreign or domestic governmental
regulation or order, whether or not the regulation or order later proves to be
invalid.

2. If the causes mentioned in subsection 1
affect only part of the lessor’s or the supplier’s capacity to perform, the
lessor or supplier shall allocate production and deliveries among his or her
customers but at his or her option may include regular customers not then under
contract for sale or lease as well as his or her own requirements for further
manufacture. The lessor or supplier may so allocate in any manner that is fair
and reasonable.

3. The lessor seasonably shall notify the
lessee and in the case of a finance lease the supplier seasonably shall notify
the lessor and the lessee, if known, that there will be delay or nondelivery
and, if allocation is required under subsection 2, of the estimated quota thus
made available for the lessee.

1. If the lessee receives notification of
a material or indefinite delay or an allocation justified under NRS 104A.2405, the lessee may by written
notification to the lessor as to any goods involved, and with respect to all of
the goods if under an installment lease contract the value of the whole lease
contract is substantially impaired (NRS 104A.2510):

(b) Except in a finance lease that is not a
consumer lease, modify the lease contract by accepting the available quota in
substitution, with due allowance from the rent payable for the balance of the
lease term for the deficiency but without further right against the lessor.

2. If, after receipt of a notification
from the lessor under NRS 104A.2405, the lessee
fails so to modify the lease agreement within a reasonable time not exceeding
30 days, the lease contract lapses with respect to any deliveries affected.

1. Whether the lessor or the lessee is in
default under a lease contract is determined by the lease agreement and this
Article.

2. If the lessor or the lessee is in
default under the lease contract, the party seeking enforcement has rights and
remedies as provided in this Article and, except as limited by this Article, as
provided in the lease agreement.

3. If the lessor or the lessee is in
default under the lease contract, the party seeking enforcement may reduce the
party’s claim to judgment, or otherwise enforce the lease contract by self-help
or any available judicial procedure or nonjudicial procedure, including an
administrative proceeding, arbitration or the like, in accordance with this Article.

4. Except as otherwise provided in
subsection 1 of NRS 104.1305 or this
Article or the lease agreement, the rights and remedies referred to in
subsections 2 and 3 are cumulative.

5. If the lease agreement covers both real
property and goods, the party seeking enforcement may proceed under this part
as to the goods, or under other applicable law as to both the real property and
the goods in accordance with his or her rights and remedies in respect of the
real property, in which case this part does not apply.

NRS 104A.2502Notice after default.Except
as otherwise provided in this article or the lease agreement, the lessor or
lessee in default under the lease contract is not entitled to notice of default
or notice of enforcement from the other party to the lease agreement.

1. Except as otherwise provided in this
article, the lease agreement may include rights and remedies for default in
addition to or in substitution for those provided in this article and may limit
or alter the measure of damages recoverable under this article.

2. Resort to a remedy provided under this
article or in the lease agreement is optional unless the remedy is expressly
agreed to be exclusive. If circumstances cause an exclusive or limited remedy
to fail of its essential purpose, or provision for an exclusive remedy is
unconscionable, remedy may be had as provided in this article.

3. Consequential damages may be liquidated
under NRS 104A.2504, or may otherwise be limited,
altered or excluded unless the limitation, alteration or exclusion is
unconscionable. Limitation, alteration or exclusion of consequential damages
for injury to the person in the case of consumer goods is prima facie
unconscionable but limitation, alteration or exclusion of damages where the
loss is commercial is not prima facie unconscionable.

4. Rights and remedies on default by the
lessor or the lessee with respect to any obligation or promise collateral or
ancillary to the lease contract are not impaired by this article.

1. Damages payable by either party for
default, or any other act or omission, including indemnity for loss or
diminution of anticipated tax benefits or loss or damage to lessor’s residual
interest, may be liquidated in the lease agreement but only at an amount or by
a formula that is reasonable in light of the then anticipated harm caused by
the default or other act or omission.

2. If the lease agreement provides for
liquidation of damages, and such provision does not comply with subsection 1,
or such provision is an exclusive or limited remedy that circumstances cause to
fail of its essential purpose, remedy may be had as provided in the Article.

3. If the lessor justifiably withholds or
stops delivery of goods because of the lessee’s default or insolvency (NRS 104A.2525 or 104A.2526),
the lessee is entitled to restitution of any amount by which the sum of his or
her payments exceeds:

(a) The amount to which the lessor is entitled by
virtue of terms liquidating the lessor’s damages in accordance with subsection
1; or

(b) In the absence of those terms, 20 percent of
the then present value of the total rent the lessee was obligated to pay for
the balance of the lease term, or, in the case of a consumer lease, the lesser
of such amount or $500.

4. A lessee’s right to restitution under
subsection 3 is subject to offset to the extent the lessor establishes:

(a) A right to recover damages under the
provisions of this Article other than subsection 1; and

(b) The amount or value of any benefits received
by the lessee directly or indirectly by reason of the lease contract.

NRS 104A.2505Cancellation and termination, and effect of cancellation,
termination, rescission or fraud on rights and remedies.

1. On cancellation of the lease contract,
all obligations that are still executory on both sides are discharged, but any
right based on prior default or performance survives, and the cancelling party
also retains any remedy for default of the whole lease contract or any
unperformed balance.

2. On termination of the lease contract,
all obligations that are still executory on both sides are discharged but any
right based on prior default or performance survives.

3. Unless the contrary intention clearly
appears, expressions of “cancellation,” “rescission” or the like of the lease
contract may not be construed as a renunciation or discharge of any claim in
damages for an antecedent default.

4. Rights and remedies for material
misrepresentation or fraud include all rights and remedies available under this
article for default.

5. Neither rescission nor a claim for
rescission of the lease contract nor rejection or return of the goods may bar
or be deemed inconsistent with a claim for damages or other right or remedy.

1. An action for default under a lease
contract, including breach of warranty or indemnity, must be commenced within 4
years after the cause of action accrued. In a lease that is not a consumer
lease, by the original lease contract the parties may reduce the period of
limitation to not less than one year.

2. A cause of action for default accrues
when the act or omission on which the default or breach of warranty is based is
or should have been discovered by the aggrieved party, or when the default
occurs, whichever is later. A cause of action for indemnity accrues when the
act or omission on which the claim for indemnity is based is or should have
been discovered by the indemnified party, whichever is later.

3. If an action commenced within the time
limited by subsection 1 is so terminated as to leave available a remedy by
another action for the same default or breach of warranty or indemnity, the
other action may be commenced after the expiration of the time limited and
within 6 months after the termination of the first action unless the
termination resulted from voluntary discontinuance or from dismissal for
failure or neglect to prosecute.

4. This section does not alter the law on
tolling of the statute of limitations nor does it apply to causes of action
that have accrued before January 1, 1990.

1. Damages based on market rent (NRS 104A.2519 or 104A.2528)
are determined according to the rent for the use of the goods concerned for a
lease term identical to the remaining lease term of the original lease
agreement and prevailing at the time of the default.

2. If evidence of rent for the use of the
goods concerned for a lease term identical to the remaining lease term of the
original lease agreement and prevailing at the times or places described in
this article is not readily available, the rent prevailing within any
reasonable time before or after the time described or at any other place or for
a different lease term which in commercial judgment or under usage of trade
would serve as a reasonable substitute for the one described may be used,
making any proper allowance for the difference, including the cost of transporting
the goods to or from the other place.

3. Evidence of a relevant rent prevailing
at a time or place or for a lease term other than the one described in this
article offered by one party is not admissible unless and until the party has
given the other party notice the court finds sufficient to prevent unfair
surprise.

4. If the prevailing rent or value of any
goods regularly leased in any established market is in issue, reports in
official publications or trade journals or in newspapers or periodicals of
general circulation published as the reports of that market are admissible in
evidence. The circumstances of the preparation of the report may be shown to
affect its weight but not its admissibility.

1. If a lessor fails to deliver the goods
in conformity to the lease contract (NRS 104A.2509)
or repudiates the lease contract (NRS 104A.2402),
or a lessee rightfully rejects the goods (NRS
104A.2509) or justifiably revokes acceptance of the goods (NRS 104A.2517), then with respect to any goods
involved, and with respect to all of the goods if under an installment lease
contract the value of the whole lease contract is substantially impaired (NRS 104A.2510), the lessor is in default under the
lease contract and the lessee may:

3. If a lessor is otherwise in default
under a lease contract, the lessee may exercise the rights and pursue the
remedies provided in the lease contract, which may include a right to cancel
the lease, and in subsection 3 of NRS 104A.2519.

4. If a lessor has breached a warranty,
whether express or implied, the lessee may recover damages (subsection 4 of NRS 104A.2519).

5. On rightful rejection or justifiable
revocation of acceptance, a lessee has a security interest in goods in the
lessee’s possession or control for any rent and security that has been paid and
any expenses reasonably incurred in their inspection, receipt, transportation
and care and custody and may hold those goods and dispose of them in good faith
and in a commercially reasonable manner, subject to the provisions of
subsection 5 of NRS 104A.2527.

6. Subject to the provisions of NRS 104A.2407, a lessee, on notifying the lessor of
the lessee’s intention to do so, may deduct all or any part of the damages
resulting from any default under the lease contract from any part of the rent
still due under the same lease contract.

1. Subject to the provisions of NRS 104A.2510 on default in installment lease
contracts, if the goods or the tender or delivery fail in any respect to
conform to the lease contract, the lessee may reject or accept the goods or
accept any commercial unit or units and reject the rest of the goods.

2. Rejection of goods is ineffective
unless it is within a reasonable time after tender or delivery of the goods and
the lessee seasonably notifies the lessor.

1. Under an installment lease contract a
lessee may reject any delivery that is nonconforming if the nonconformity
substantially impairs the value of that delivery and cannot be cured or the
nonconformity is a defect in the required documents; but if the nonconformity
does not fall within subsection 2 and the lessor or the supplier gives adequate
assurance of its cure, the lessee must accept that delivery.

2. Whenever nonconformity or default with
respect to one or more deliveries substantially impairs the value of the
installment lease contract as a whole there is a default with respect to the
whole. But, the aggrieved party reinstates the installment lease contract as a
whole if the aggrieved party accepts a nonconforming delivery without
seasonably notifying of cancellation or brings an action with respect only to
past deliveries or demands performance as to future deliveries.

1. Subject to any security interest of a
lessee (subsection 5 of NRS 104A.2508), if a
lessor or a supplier has no agent or place of business at the market of
rejection, a merchant lessee, after rejection of goods in his or her possession
or control, shall follow any reasonable instructions received from the lessor
or the supplier with respect to the goods. In the absence of those instructions
a merchant lessee shall make reasonable efforts to sell, lease or otherwise
dispose of the goods for the lessor’s account if they threaten to decline in
value speedily. Instructions are not reasonable if on demand indemnity for expenses
is not forthcoming.

2. If a merchant lessee (subsection 1) or
any other lessee (NRS 104A.2512) disposes of
goods, he or she is entitled to reimbursement either from the lessor or the
supplier or out of the proceeds for reasonable expenses of caring for and
disposing of the goods and, if the expenses include no disposition commission,
to such commission as is usual in the trade, or if there is none, to a
reasonable sum not exceeding 10 percent of the gross proceeds.

3. In complying with this section or NRS 104A.2512, the lessee is held only to good
faith. Good faith conduct hereunder is neither acceptance or conversion nor the
basis of an action for damages.

4. A purchaser who purchases in good faith
from a lessee pursuant to this section or NRS
104A.2512 takes the goods free of any rights of the lessor and the supplier
even though the lessee fails to comply with one or more of the requirements of
this Article.

1. Except as otherwise provided with
respect to goods that threaten to decline in value speedily (NRS 104A.2511) and subject to any security interest
of a lessee (subsection 5 of NRS 104A.2508):

(a) The lessee, after rejection of goods in the
lessee’s possession, shall hold them with reasonable care at the lessor’s or
supplier’s disposition for a reasonable time after the lessee’s seasonable
notification of rejection;

(b) If the lessor or the supplier gives no
instructions within a reasonable time after notification of rejection, the
lessee may store the rejected goods for the lessor’s or the supplier’s account
or ship them to the lessor or the supplier or dispose of them for the lessor’s
or the supplier’s account with reimbursement in the manner provided in NRS 104A.2511; but

(c) The lessee has no further obligations with
regard to goods rightfully rejected.

2. Action by the lessee pursuant to
subsection 1 is not acceptance or conversion.

NRS 104A.2513Cure by lessor of improper tender or delivery; replacement.

1. If any tender or delivery by the lessor
or the supplier is rejected because nonconforming and the time for performance
has not yet expired, the lessor or the supplier may seasonably notify the
lessee of the lessor’s or the supplier’s intention to cure and may then make a
conforming delivery within the time provided in the lease contract.

2. If the lessee rejects a nonconforming
tender that the lessor or the supplier had reasonable grounds to believe would
be acceptable with or without money allowance, the lessor or the supplier may
have a further reasonable time to substitute a conforming tender if he or she
seasonably notifies the lessee.

1. In rejecting goods, a lessee’s failure
to state a particular defect that is ascertainable by reasonable inspection
precludes the lessee from relying on the defect to justify rejection or to
establish default:

(a) If, stated seasonably, the lessor or the
supplier could have cured it (NRS 104A.2513); or

(b) Between merchants if the lessor or the
supplier after rejection has made a request in writing for a full and final
written statement of all defects on which the lessee proposes to rely.

2. A lessee’s failure to reserve rights
when paying rent or other consideration against documents precludes recovery of
the payment for defects apparent in the documents.

1. Acceptance of goods occurs after the
lessee has had a reasonable opportunity to inspect the goods and:

(a) The lessee signifies or acts with respect to
the goods in a manner that signifies to the lessor or the supplier that the
goods are conforming or that the lessee will take or retain them in spite of
their nonconformity; or

(b) The lessee fails to make an effective
rejection of the goods (subsection 2 of NRS 104A.2509).

2. Acceptance of a part of any commercial
unit is acceptance of that entire unit.

NRS 104A.2516Effect of acceptance of goods; notice of default; burden of
establishing default after acceptance; notice of claim or litigation to person
answerable over.

1. A lessee must pay rent for any goods
accepted in accordance with the lease contract, with due allowance for goods
rightfully rejected or not delivered.

2. A lessee’s acceptance of goods
precludes rejection of the goods accepted. In the case of a finance lease, if
made with knowledge of a nonconformity, acceptance cannot be revoked because of
it. In any other case, if made with knowledge of a nonconformity, acceptance cannot
be revoked because of it unless the acceptance was on the reasonable assumption
that the nonconformity would be seasonably cured. Acceptance does not of itself
impair any other remedy provided by this Article or the lease agreement for
nonconformity.

3. If a tender has been accepted:

(a) Within a reasonable time after the lessee
discovers or should have discovered any default, the lessee shall notify the
lessor and the supplier, if any, or be barred from any remedy against the party
not notified;

(b) Except in the case of a consumer lease,
within a reasonable time after the lessee receives notice of litigation for
infringement or the like (NRS 104A.2211) the
lessee shall notify the lessor or be barred from any remedy over for liability
established by the litigation; and

(c) The burden is on the lessee to establish any
default.

4. If a lessee is sued for breach of a
warranty or other obligation for which a lessor or a supplier is answerable
over the following apply:

(a) The lessee may give the lessor or the
supplier written notice of the litigation. If the notice states that the person
notified may come in and defend and that if the person does not do so the
person will be bound in any action against him or her by the lessee by any
determination of fact common to the two litigations, then unless the person
notified after seasonable receipt of the notice does come in and defend the
person is so bound.

(b) The lessor or the supplier may demand in
writing that the lessee turn over control of the litigation including
settlement if the claim is one for infringement or the like (NRS 104A.2211) or else be barred from any remedy
over. If the demand states that the lessor or the supplier agrees to bear all
expense and to satisfy any adverse judgment, then unless the lessee after
seasonable receipt of the demand does turn over control the lessee is so
barred.

5. Subsections 3 and 4 apply to any
obligation of a lessee to hold the lessor or the supplier harmless against
infringement or the like (NRS 104A.2211).

1. A lessee may revoke acceptance of a lot
or commercial unit whose nonconformity substantially impairs its value to the
lessee if the lessee has accepted it:

(a) Except in the case of a finance lease, on the
reasonable assumption that its nonconformity would be cured and it has not been
seasonably cured; or

(b) Without discovery of the nonconformity if the
lessee’s acceptance was reasonably induced either by the lessor’s assurances
or, except in the case of a finance lease, by the difficulty of discovery
before acceptance.

2. Except in the case of a finance lease
that is not a consumer lease, a lessee may revoke acceptance of a lot or
commercial unit if the lessor defaults under the lease contract and the default
substantially impairs the value of that lot or commercial unit to the lessee.

3. If the lease agreement so provides, the
lessee may revoke acceptance of a lot or commercial unit because of other
defaults by the lessor.

4. Revocation of acceptance must occur
within a reasonable time after the lessee discovers or should have discovered
the ground for it and before any substantial change in condition of the goods
which is not caused by the nonconformity. Revocation is not effective until the
lessee notifies the lessor.

5. A lessee who so revokes has the same
rights and duties with regard to the goods involved as if the lessee had
rejected them.

1. After default by a lessor under a lease
contract of the type described in subsection 1 of NRS
104A.2508, or, if agreed after other default by the lessor, the lessee may
cover by making any purchase or lease of or contract to purchase or lease goods
in substitution for those due from the lessor.

2. Except as otherwise provided with
respect to damages liquidated in the lease agreement (NRS
104A.2504) or otherwise determined pursuant to agreement of the parties (NRS 104.1302 and 104A.2503),
if a lessee’s cover is by lease agreement substantially similar to the original
lease agreement and the lease agreement is made in good faith and in a
commercially reasonable manner, the lessee may recover from the lessor as
damages:

(a) The present value, as of the date of the
commencement of the term of the new lease agreement, of the rent under the new
lease agreement applicable to that period of the new lease term which is
comparable to the then remaining term of the original lease agreement minus the
present value as of the same date of the total rent for the remaining lease
term of the original lease agreement; and

(b) Any incidental or consequential damages less
expenses saved in consequence of the lessor’s default.

3. If a lessee’s cover is by lease
agreement that for any reason does not qualify for treatment under subsection
2, or is by purchase or otherwise, the lessee may recover from the lessor as if
the lessee had elected not to cover and NRS 104A.2519
governs.

NRS 104A.2519Lessee’s damages for nondelivery, repudiation, default and
breach of warranty in regard to accepted goods.

1. Except as otherwise provided with
respect to damages liquidated in the lease agreement (NRS
104A.2504) or otherwise determined pursuant to agreement of the parties (NRS 104.1302 and 104A.2503),
if a lessee elects not to cover or a lessee elects to cover and the cover is by
lease agreement that for any reason does not qualify for treatment under
subsection 2 of NRS 104A.2518, or is by purchase
or otherwise, the measure of damages for nondelivery or repudiation by the
lessor or for rejection or revocation of acceptance by the lessee is the
present value, as of the date of the default, of the then market rent minus the
present value as of the same date of the original rent, computed for the remaining
lease term of the original lease agreement, together with incidental and
consequential damages, less expenses saved in consequence of the lessor’s
default.

2. Market rent is to be determined as of
the place for tender or, in cases of rejection after arrival or revocation of
acceptance, as of the place of arrival.

3. Except as otherwise agreed, if the
lessee has accepted goods and given notification (subsection 3 of NRS 104A.2516), the measure of damages for
nonconforming tender or delivery or other default by a lessor is the loss
resulting in the ordinary course of events from the lessor’s default as
determined in any manner that is reasonable together with incidental and
consequential damages, less expenses saved in consequence of the lessor’s
default.

4. Except as otherwise agreed, the measure
of damages for breach of warranty is the present value at the time and place of
acceptance of the difference between the value of the use of the goods accepted
and the value if they had been as warranted for the lease term, unless special
circumstances show proximate damages of a different amount, together with
incidental and consequential damages, less expenses saved in consequence of the
lessor’s default or breach of warranty.

1. Incidental damages resulting from a
lessor’s default include expenses reasonably incurred in inspection, receipt,
transportation, and care and custody of goods rightfully rejected or goods the
acceptance of which is justifiably revoked, any commercially reasonable
charges, expenses or commissions in connection with effecting cover, and any
other reasonable expense incident to the default.

2. Consequential damages resulting from a
lessor’s default include:

(a) Any loss resulting from general or particular
requirements and needs of which the lessor at the time of contracting had
reason to know and which could not reasonably be prevented by cover or
otherwise; and

(b) Injury to person or property proximately
resulting from any breach of warranty.

1. Specific performance may be decreed if
the goods are unique or in other proper circumstances.

2. A decree for specific performance may
include any terms and conditions as to payment of the rent, damages or other
relief that the court deems just.

3. A lessee has a right of replevin,
detinue, sequestration, claim and delivery, or the like for goods identified to
the lease contract if after reasonable effort the lessee is unable to effect
cover for those goods or the circumstances reasonably indicate that the effort
will be unavailing.

1. Subject to subsection 2 and even though
the goods have not been shipped, a lessee who has paid a part or all of the
rent and security for goods identified to a lease contract (NRS 104A.2217) on making and keeping good a tender
of any unpaid portion of the rent and security due under the lease contract may
recover the goods identified from the lessor if the lessor becomes insolvent
within 10 days after receipt of the first installment of rent and security.

2. A lessee acquires the right to recover
goods identified to a lease contract only if they conform to the lease
contract.

1. If a lessee wrongfully rejects or revokes
acceptance of goods or fails to make a payment when due or repudiates with
respect to a part or the whole, then, with respect to any goods involved, and
with respect to all of the goods if under an installment lease contract the
value of the whole lease contract is substantially impaired (NRS 104A.2510), the lessee is in default under the
lease contract and the lessor may:

(f) Exercise any other rights or pursue any other
remedies provided in the lease contract.

2. If a lessor does not fully exercise a
right or obtain a remedy to which the lessor is entitled under subsection 1,
the lessor may recover the loss resulting in the ordinary course of events from
the lessee’s default as determined in any reasonable manner, together with
incidental damages, less expenses saved in consequence of the lessee’s default.

3. If a lessee is otherwise in default
under a lease contract, the lessor may exercise the rights and pursue the
remedies provided in the lease contract which may include a right to cancel the
lease. In addition, unless otherwise provided in the lease contract:

(a) If the default substantially impairs the
value of the lease contract to the lessor, the lessor may exercise the rights
and pursue the remedies provided in subsections 1 and 2; or

(b) If the default does not substantially impair
the value of the lease contract to the lessor, the lessor may recover as
provided in subsection 2.

1. After default by the lessee under the
lease contract of the type described in subsection 1 or paragraph (a) of
subsection 3 of NRS 104A.2523 or, if agreed,
after other default by the lessee, the lessor may:

(a) Identify to the lease contract conforming
goods not already identified if at the time the lessor learned of the default
they were in the lessor’s or the supplier’s possession or control; and

(b) Dispose of goods (subsection 1 of NRS 104A.2527) that demonstrably have been intended
for the particular lease contract even though those goods are unfinished.

2. If the goods are unfinished, in the
exercise of reasonable commercial judgment for the purposes of avoiding loss
and of effective realization, an aggrieved lessor or the supplier may either
complete manufacture and wholly identify the goods to the lease contract or
cease manufacture and lease, sell or otherwise dispose of the goods for scrap
or salvage value or proceed in any other reasonable manner.

1. If a lessor discovers the lessee to be
insolvent, the lessor may refuse to deliver the goods.

2. After a default by the lessee under the
lease contract of the type described in subsection 1 or paragraph (a) of
subsection 3 of NRS 104A.2523 or, if agreed,
after other default by the lessee, the lessor has the right to take possession
of the goods. If the lease contract so provides, the lessor may require the
lessee to assemble the goods and make them available to the lessor at a place
to be designated by the lessor which is reasonably convenient to both parties.
Without removal, the lessor may render unusable any goods employed in trade or
business, and may dispose of goods on the lessee’s premises (NRS 104A.2527).

3. The lessor may proceed under subsection
2 without judicial process if it can be done without breach of the peace or the
lessor may proceed by action.

1. A lessor may stop delivery of goods in
the possession of a carrier or other bailee if the lessor discovers the lessee
to be insolvent and may stop delivery of carload, truckload, planeload or
larger shipments of express or freight if the lessee repudiates or fails to
make a payment due before delivery, whether for rent, security or otherwise
under the lease contract, or for any other reason the lessor has a right to
withhold or take possession of the goods.

2. In pursuing its remedies under
subsection 1, the lessor may stop delivery until:

(a) Receipt of the goods by the lessee;

(b) Acknowledgment to the lessee by any bailee of
the goods, except a carrier, that the bailee holds the goods for the lessee; or

(c) Such an acknowledgment to the lessee by a
carrier via reshipment or as a warehouse.

3. To stop delivery, a lessor shall so
notify as to enable the bailee by reasonable diligence to prevent delivery of
the goods. After notification, the bailee shall hold and deliver the goods
according to the directions of the lessor, but the lessor is liable to the
bailee for any ensuing charges or damages. A carrier who has issued a
nonnegotiable bill of lading is not obliged to obey a notification to stop
received from a person other than the consignor.

1. After a default by a lessee under the
lease contract of the type described in subsection 1 or paragraph (a) of
subsection 3 of NRS 104A.2523 or after the lessor
refuses to deliver or takes possession of goods (NRS
104A.2525 or 104A.2526), or, if agreed, after
other default by the lessee, the lessor may dispose of the goods concerned or
the undelivered balance thereof by lease, sale or otherwise.

2. Except as otherwise provided with
respect to damages liquidated in the lease agreement (NRS
104A.2504) or otherwise determined pursuant to agreement of the parties (NRS 104.1302 and 104A.2503),
if the disposition is by lease agreement substantially similar to the original
lease agreement and the lease agreement is made in good faith and in a
commercially reasonable manner, the lessor may recover from the lessee as
damages:

(a) Accrued and unpaid rent as of the date of the
commencement of the term of the new lease agreement;

(b) The present value, as of the same date, of
the total rent for the then remaining lease term of the original lease
agreement minus the present value, as of the same date, of the rent under the
new lease agreement applicable to that period of the new lease term which is
comparable to the then remaining term of the original lease agreement; and

3. If the lessor’s disposition is by lease
agreement that for any reason does not qualify for treatment under subsection
2, or is by sale or otherwise, the lessor may recover from the lessee as if the
lessor had elected not to dispose of the goods and NRS
104A.2528 governs.

4. A subsequent buyer or lessee who buys
or leases from the lessor in good faith for value as a result of a disposition
under this section takes the goods free of the original lease contract and any
rights of the original lessee even though the lessor fails to comply with one
or more of the requirements of this Article.

5. The lessor is not accountable to the
lessee for any profit made on any disposition. A lessee who has rightfully
rejected or justifiably revoked acceptance shall account to the lessor for any
excess over the amount of the lessee’s security interest (subsection 5 of NRS 104A.2508).

NRS 104A.2528Lessor’s damages for nonacceptance, failure to pay, repudiation
or other default.

1. Except as otherwise provided with
respect to damages liquidated in the lease agreement (NRS
104A.2504) or otherwise determined pursuant to agreement of the parties (NRS 104.1302 and 104A.2503),
if a lessor elects to retain the goods or a lessor elects to dispose of the
goods and the disposition is by lease agreement that for any reason does not
qualify for treatment under subsection 2 of NRS
104A.2527, or is by sale or otherwise, the lessor may recover from the
lessee as damages for a default of the type described in subsection 1 or
paragraph (a) of subsection 3 of NRS 104A.2523,
or, if agreed, for other default of the lessee:

(a) Accrued and unpaid rent as of the date of
default if the lessee has never taken possession of the goods, or, if the
lessee has taken possession of the goods, as of the date the lessor repossesses
the goods or an earlier date on which the lessee makes a tender of the goods to
the lessor;

(b) The present value as of the date determined
under paragraph (a) of the total rent for the then remaining lease term of the
original lease agreement minus the present value as of the same date of the
market rent at the place where the goods are located computed for the same
lease term; and

(c) Any incidental damages allowed under NRS 104A.2530, less expenses saved in consequence of
the lessee’s default.

2. If the measure of damages provided in
subsection 1 is inadequate to put a lessor in as good a position as performance
would have, the measure of damages is the present value of the profit,
including reasonable overhead, the lessor would have made from full performance
by the lessee, together with any incidental damages allowed under NRS 104A.2530, due allowance for costs reasonably
incurred and due credit for payments or proceeds of disposition.

1. After default by the lessee under the
lease contract of the type described in subsection 1 or paragraph (a) of
subsection 3 of NRS 104A.2523 or, if agreed,
after other default by the lessee, if the lessor complies with subsection 2,
the lessor may recover from the lessee as damages:

(a) For goods accepted by the lessee and not
repossessed by or tendered to the lessor, and for conforming goods lost or
damaged within a commercially reasonable time after risk of loss passes to the
lessee (NRS 104A.2219):

(1) Accrued and unpaid rent as of the date
of entry of judgment in favor of the lessor;

(2) The present value as of the same date
of the rent for the then remaining lease term of the lease agreement; and

(b) For goods identified to the lease contract if
the lessor is unable after reasonable effort to dispose of them at a reasonable
price or the circumstances reasonably indicate that effort will be unavailing:

(1) Accrued and unpaid rent as of the date
of entry of judgment in favor of the lessor;

(2) The present value as of the same date
of the rent for the then remaining lease term of the lease agreement; and

2. Except as provided in subsection 3, the
lessor shall hold for the lessee for the remaining lease term of the lease
agreement any goods that have been identified to the lease contract and are in
the lessor’s control.

3. The lessor may dispose of the goods at
any time before collection of the judgment for damages obtained pursuant to
subsection 1. If the disposition is before the end of the remaining lease term
of the lease agreement, the lessor’s recovery against the lessee for damages is
governed by NRS 104A.2527 or 104A.2528, and the lessor will cause an appropriate
credit to be provided against a judgment for damages to the extent that the
amount of the judgment exceeds the recovery available pursuant to NRS 104A.2527 or 104A.2528.

4. Payment of the judgment for damages
obtained pursuant to subsection 1 entitles the lessee to the use and possession
of the goods not then disposed of for the remaining lease term of and in
accordance with the lease agreement.

5. After default by the lessee under the
lease contract of the type described in subsection 1 or paragraph (a) of
subsection 3 of NRS 104A.2523 or, if agreed,
after other default by the lessee, a lessor who is held not entitled to rent
under this section must nevertheless be awarded damages for nonacceptance under
NRS 104A.2527 or 104A.2528.

NRS 104A.2530Lessor’s incidental damages.Incidental
damages to an aggrieved lessor include any commercially reasonable charges,
expenses or commissions incurred in stopping delivery, in the transportation,
care and custody of goods after the lessee’s default, in connection with return
or disposition of the goods, or otherwise resulting from the default.

1. If a third party so deals with goods
that have been identified to a lease contract as to cause actionable injury to
a party to the lease contract:

(a) The lessor has a right of action against the
third party; and

(b) The lessee also has a right of action against
the third party if the lessee:

(1) Has a security interest in the goods;

(2) Has an insurable interest in the
goods; or

(3) Bears the risk of loss under the lease
contract or has since the injury assumed that risk as against the lessor and
the goods have been converted or destroyed.

2. If at the time of the injury the party
plaintiff did not bear the risk of loss as against the other party to the lease
contract and there is no arrangement between them for disposition of the
recovery, the party plaintiff’s suit or settlement, subject to his or her own
interest, is as a fiduciary for the other party to the lease contract.

3. Either party with the consent of the
other may sue for the benefit of whom it may concern.

NRS 104A.2532Lessor’s rights to residual interest.In
addition to any other recovery permitted by this article or other law, the
lessor may recover from the lessee an amount that will fully compensate the
lessor for any loss of or damage to the lessor’s residual interest in the goods
caused by the default of the lessee.

(a) “Payment order” means an instruction of a
sender to a receiving bank, transmitted orally, electronically or in writing,
to pay, or to cause another bank to pay, a fixed or determinable amount of
money to a beneficiary if:

(1) The instruction does not state a
condition to payment to the beneficiary other than time of payment;

(2) The receiving bank is to be reimbursed
by debiting an account of, or otherwise receiving payment from, the sender; and

(3) The instruction is transmitted by the
sender directly to the receiving bank or to an agent, funds-transfer system, or
communication system for transmittal to the receiving bank.

(b) “Beneficiary” means the person to be paid by
the beneficiary’s bank.

(c) “Beneficiary’s bank” means the bank
identified in a payment order in which an account of the beneficiary is to be
credited pursuant to the order or which otherwise is to make payment to the
beneficiary if the order does not provide for payment to an account.

(d) “Receiving bank” means the bank to which the
sender’s instruction is addressed.

(e) “Sender” means the person giving the
instruction to the receiving bank.

2. If an instruction complying with
paragraph (a) of subsection 1 is to make more than one payment to a
beneficiary, the instruction is a separate payment order with respect to each
payment.

1. “Funds transfer” means the series of transactions,
beginning with the originator’s payment order, made for the purpose of making
payment to the beneficiary of the order. The term includes any payment order
issued by the originator’s bank or an intermediary bank intended to carry out
the originator’s payment order. A funds transfer is completed by acceptance by
the beneficiary’s bank of a payment order for the benefit of the beneficiary of
the originator’s payment order.

2. “Intermediary bank” means a receiving
bank other than the originator’s bank or the beneficiary’s bank.

3. “Originator” means the sender of the
first payment order in a funds transfer.

4. “Originator’s bank” means the receiving
bank to which the payment order of the originator is issued if the originator
is not a bank, or the originator if the originator is a bank.

(a) “Authorized account” means a deposit account
of a customer in a bank designated by the customer as a source of payment of
payment orders issued by the customer to the bank. If a customer does not so
designate an account, any account of the customer is an authorized account if
payment of a payment order from that account is not inconsistent with a
restriction on the use of that account.

(b) “Bank” means a person engaged in the business
of banking and includes a savings bank, savings and loan association, credit
union, and trust company. A branch or separate office of a bank is a separate
bank for purposes of this Article.

(c) “Customer” means a person, including a bank,
having an account with a bank or from whom a bank has agreed to receive payment
orders.

(d) “Funds-transfer business day” of a receiving
bank means the part of a day during which the receiving bank is open for the
receipt, processing and transmittal of payment orders and cancellations and
amendments of payment orders.

(e) “Funds-transfer system” means a wire transfer
network, automated clearing house, or other communication system of a clearing
house or other association of banks through which a payment order by a bank may
be transmitted to the bank to which the order is addressed.

(f) “Prove” with respect to a fact means to meet
the burden of establishing the fact (paragraph (h) of subsection 2 of NRS 104.1201).

2. Other definitions applying to this
Article and the sections in which they appear are:

1. The time of receipt of a payment order
or communication cancelling or amending a payment order is determined by the
rules applicable to receipt of a notice stated in NRS 104.1202. A receiving bank may fix a
cutoff time or times of a funds-transfer business day for the receipt and
processing of payment orders and communications cancelling or amending payment
orders. Different cutoff times may apply to payment orders, cancellations or
amendments, or to different categories of payment orders, cancellations or
amendments. A cutoff time may apply to senders generally or different cutoff
times may apply to different senders or categories of payment orders. If a
payment order or communication cancelling or amending a payment order is
received after the close of a funds-transfer business day or after the
appropriate cutoff time on a funds-transfer business day, the receiving bank
may treat the payment order or communication as received at the opening of the
next funds-transfer business day.

2. If this Article refers to an execution
date or payment date or states a day on which a receiving bank is required to
take action, and the date or day does not fall on a funds-transfer business
day, the next day that is a funds-transfer business day is treated as the date
or day stated, unless the contrary is stated in this Article.

NRS 104A.4107Federal Reserve regulations and operating circulars.Regulations of the Board of Governors of the
Federal Reserve System and operating circulars of the Federal Reserve banks
supersede any inconsistent provision of this article to the extent of the
inconsistency.

NRS 104A.4108Exclusion of certain consumer transactions governed by federal
law; resolution of inconsistencies between federal law and state law.

1. Except as otherwise provided in
subsection 2, this article does not apply to a funds transfer any part of which
is governed by the Electronic Fund Transfer Act of 1978 (Title XX, Public Law
95-630, 92 Stat. 3728, 15 U.S.C. §§ 1693 et seq.) as amended from time to time.

2. This article applies to a funds
transfer that is a remittance transfer as defined in section 919 of the
Electronic Fund Transfer Act, 15 U.S.C. § 1693o-1, as amended from time to
time, unless the remittance transfer is an electronic fund transfer as defined
in section 903 of the Electronic Fund Transfer Act, 15 U.S.C. § 1693a, as
amended from time to time.

3. In a funds transfer to which this
article applies, in the event of an inconsistency between an applicable
provision of this article and an applicable provision of the Electronic Fund
Transfer Act, the provision of the Electronic Fund Transfer Act governs to the
extent of the inconsistency.

1. A payment order received by the
receiving bank is the authorized order of the person identified as sender if
the person authorized the order or is otherwise bound by it under the law of
agency.

2. If a bank and its customer have agreed
that the authenticity of payment orders issued to the bank in the name of the
customer as sender will be verified pursuant to a security procedure, a payment
order received by the receiving bank is effective as the order of the customer,
whether or not authorized, if the security procedure is a commercially
reasonable method of providing security against unauthorized payment orders,
and the bank proves that it accepted the payment order in good faith and in
compliance with the security procedure and any written agreement or instruction
of the customer restricting acceptance of payment orders issued in the name of
the customer. The bank is not required to follow an instruction that violates a
written agreement with the customer or notice of which is not received at a
time and in a manner affording the bank a reasonable opportunity to act on it
before the payment order is accepted.

3. Commercial reasonableness of a security
procedure is a question of law to be determined by considering the wishes of
the customer expressed to the bank, the circumstances of the customer known to
the bank, including the size, type and frequency of payment orders normally
issued by the customer to the bank, alternative security procedures offered to
the customer, and security procedures in general use by customers and receiving
banks similarly situated. A security procedure is deemed to be commercially
reasonable if:

(a) The security procedure was chosen by the
customer after the bank offered, and the customer refused, a security procedure
that was commercially reasonable for that customer; and

(b) The customer expressly agreed in writing to
be bound by any payment order, whether or not authorized, issued in its name
and accepted by the bank in compliance with the security procedure chosen by
the customer.

4. The term “sender” in this article
includes the customer in whose name a payment order is issued if the order is
the authorized order of the customer under subsection 1, or it is effective as
the order of the customer under subsection 2.

5. This section applies to amendments and
cancellations of payment orders to the same extent it applies to payment
orders.

6. Except as otherwise provided in this
section and in paragraph (a) of subsection 1 of NRS
104A.4203, rights and obligations arising under this section or NRS 104A.4203 may not be varied by agreement.

1. If an accepted payment order is not,
under subsection 1 of NRS 104A.4202, an
authorized order of a customer identified as sender, but is effective as an
order of the customer pursuant to subsection 2 of NRS
104A.4202, the following rules apply:

(a) By express written agreement, the receiving
bank may limit the extent to which it is entitled to enforce or retain payment
of the payment order.

(b) The receiving bank is not entitled to enforce
or retain payment of the payment order if the customer proves that the order
was not caused, directly or indirectly, by a person:

(1) Entrusted at any time with duties to
act for the customer with respect to payment orders or the security procedure;
or

(2) Who obtained access to transmitting
facilities of the customer or who obtained, from a source controlled by the
customer and without authority of the receiving bank, information facilitating
breach of the security procedure, regardless of how the information was
obtained or whether the customer was at fault.

Ê Information
includes any access device, computer software, or the like.

2. This section applies to amendments of
payment orders to the same extent it applies to payment orders.

NRS 104A.4204Refund of payment and duty of customer to report with respect to
unauthorized payment order.

1. If a receiving bank accepts a payment
order issued in the name of its customer as sender which is not authorized and
not effective as the order of the customer under NRS
104A.4202, or not enforceable, in whole or in part, against the customer
under NRS 104A.4203, the bank shall refund any
payment of the payment order received from the customer to the extent the bank
is not entitled to enforce payment and shall pay interest on the refundable
amount calculated from the date the bank received payment to the date of the
refund. However, the customer is not entitled to interest from the bank on the
amount to be refunded if the customer fails to exercise ordinary care to
determine that the order was not authorized by the customer and to notify the
bank of the relevant facts within a reasonable time not exceeding 90 days after
the date he or she received notification from the bank that the order was
accepted or that his or her account was debited with respect to the order. The
bank is not entitled to any recovery from the customer on account of a failure
by the customer to give notification as stated in this section.

2. Reasonable time under subsection 1 may
be fixed by agreement as stated in subsection 2 of NRS 104.1302, but the obligation of a
receiving bank to refund payment as stated in subsection 1 may not otherwise be
varied by agreement.

1. If an accepted payment order was
transmitted pursuant to a security procedure for the detection of error and the
payment order erroneously instructed payment to a beneficiary not intended by
the sender, erroneously instructed payment in an amount greater than the amount
intended by the sender, or was an erroneously transmitted duplicate of a
payment order previously sent by the sender, the following rules apply:

(a) If the sender proves that the sender or a
person acting on his or her behalf pursuant to NRS
104A.4206 complied with the security procedure and that the error would
have been detected if the receiving bank had also complied, the sender is not
obliged to pay the order to the extent stated in paragraphs (b) and (c).

(b) If the funds transfer is completed on the
basis of a payment order erroneous for the first or third reason described in
subsection 1, the sender is not obliged to pay the order and the receiving bank
is entitled to recover from the beneficiary any amount paid to the beneficiary
to the extent allowed by the law governing mistake and restitution.

(c) If the funds transfer is completed on the
basis of a payment order erroneous for the second reason described in
subsection 1, the sender is not obliged to pay the order to the extent the
amount received by the beneficiary is greater than the amount intended by the
sender. In that case, the receiving bank is entitled to recover from the
beneficiary the excess amount received to the extent allowed by the law
governing mistake and restitution.

2. If the sender of an erroneous payment
order described in subsection 1 is not obliged to pay all or part of the order,
and the sender receives notification from the receiving bank that the order was
accepted by the bank or that the sender’s account was debited with respect to
the order, the sender has a duty to exercise ordinary care, on the basis of
information available to him or her, to discover the error with respect to the
order and to advise the bank of the relevant facts within a reasonable time,
not exceeding 90 days, after the bank’s notification was received by him or
her. If the bank proves that the sender failed to perform that duty, the sender
is liable to the bank for the loss the bank proves it incurred as a result of
the failure, but the liability of the sender may not exceed the amount of his
or her order.

3. This section applies to amendments to
payment orders to the same extent it applies to payment orders.

NRS 104A.4206Transmission of payment order through funds-transfer or other
communication system.

1. If a payment order addressed to a
receiving bank is transmitted to a funds-transfer system or other third-party
communication system for transmittal to the bank, the system is deemed to be an
agent of the sender for the purpose of transmitting the payment order to the
bank. If there is a discrepancy between the terms of the payment order
transmitted to the system and the terms of the payment order transmitted by the
system to the bank, the terms of the payment order of the sender are those
transmitted by the system. This section does not apply to a funds-transfer
system of the Federal Reserve banks.

2. This section applies to cancellations
and amendments of payment orders to the same extent it applies to payment
orders.

1. Except as otherwise provided in
subsection 2, if, in a payment order received by the beneficiary’s bank, the
name, bank account number or other identification of the beneficiary refers to
a nonexistent or unidentifiable person or account, no person has rights as a
beneficiary of the order and acceptance of the order cannot occur.

2. If a payment order received by the
beneficiary’s bank identifies the beneficiary both by name and by an
identifying or bank account number and the name and number identify different
persons, the following rules apply:

(a) Except as otherwise provided in subsection 3,
if the beneficiary’s bank does not know that the name and number refer to
different persons, it may rely on the number as the proper identification of
the beneficiary of the order. The beneficiary’s bank need not determine whether
the name and number refer to the same person.

(b) If the beneficiary’s bank pays the person
identified by name or knows that the name and number identify different
persons, no person has rights as beneficiary except the person paid by the
beneficiary’s bank if that person was entitled to receive payment from the
originator of the funds transfer. If no person has rights as beneficiary,
acceptance of the order cannot occur.

3. If a payment order described in
subsection 2 is accepted, the originator’s payment order described the
beneficiary inconsistently by name and number, and the beneficiary’s bank pays
the person identified by number as permitted by paragraph (a) of subsection 2,
the following rules apply:

(a) If the originator is a bank, the originator
is obliged to pay its order.

(b) If the originator is not a bank and proves
that the person identified by number was not entitled to receive payment from
the originator, the originator is not obliged to pay its order unless the
originator’s bank proves that the originator, before acceptance of the
originator’s order, had notice that payment of a payment order issued by the
originator might be made by the beneficiary’s bank on the basis of an
identifying or bank account number even if it identified a person different
from the named beneficiary. Proof of notice may be made by any admissible
evidence. The originator’s bank satisfies the burden of proof if it proves that
the originator, before the payment order was accepted, signed a writing stating
the information to which the notice relates.

4. In a case governed by paragraph (a) of
subsection 2, if the beneficiary’s bank rightfully pays the person identified
by number and that person was not entitled to receive payment from the
originator, the amount paid may be recovered from that person to the extent
allowed by the law governing mistake and restitution as follows:

(a) If the originator is obliged to pay its
payment order as stated in subsection 3, the originator has the right to
recover.

(b) If the originator is not a bank and is not
obliged to pay its payment order, the originator’s bank has the right to
recover.

1. If a payment order identifies an
intermediary bank or the beneficiary’s bank only by an identifying number, the
following rules apply:

(a) The receiving bank may rely on the number as
the proper identification of the intermediary or beneficiary’s bank and need
not determine whether the number identifies a bank.

(b) The sender is obliged to compensate the
receiving bank for any loss and expenses incurred by the receiving bank as a
result of its reliance on the number in executing or attempting to execute the
order.

2. If a payment order identifies an
intermediary bank or the beneficiary’s bank both by name and an identifying
number and the name and number identify different persons, the following rules
apply:

(a) If the sender is a bank, the receiving bank
may rely on the number as the proper identification of the intermediary or
beneficiary’s bank if the receiving bank, when it executes the sender’s order,
does not know that the name and number identify different persons. The
receiving bank need not determine whether the name and number refer to the same
person or whether the number refers to a bank. The sender is obliged to
compensate the receiving bank for any loss and expenses incurred by the
receiving bank as a result of its reliance on the number in executing or
attempting to execute the order.

(b) If the sender is not a bank and the receiving
bank proves that the sender, before the payment order was accepted, had notice
that the receiving bank might rely on the number as the proper identification
of the intermediary or beneficiary’s bank even if it identifies a person
different from the bank identified by name, the rights and obligations of the
sender and the receiving bank are governed by paragraph (a), as though the
sender were a bank. Proof of notice may be made by any admissible evidence. The
receiving bank satisfies the burden of proof if it proves that the sender,
before the payment order was accepted, signed a writing stating the information
to which the notice relates.

(c) Whether or not the sender is a bank, the
receiving bank may rely on the name as the proper identification of the
intermediary or beneficiary’s bank if the receiving bank, at the time it
executes the sender’s order, does not know that the name and number identify
different persons. The receiving bank need not determine whether the name and
number refer to the same person.

(d) If the receiving bank knows that the name and
number identify different persons, reliance on either the name or the number in
executing the sender’s payment order is a breach of the obligation stated in
paragraph (a) of subsection 1 of NRS 104A.4302.

1. Except as otherwise provided in
subsection 4, a receiving bank other than the beneficiary’s bank accepts a
payment order when it executes the order.

2. Except as otherwise provided in
subsections 3 and 4, a beneficiary’s bank accepts a payment order at the
earliest of the following times:

(a) When the bank pays the beneficiary as stated
in subsection 1 or 2 of NRS 104A.4405, or
notifies the beneficiary of receipt of the order or that the account of the
beneficiary has been credited with respect to the order unless the notice
indicates that the bank is rejecting the order or that funds with respect to
the order may not be withdrawn or used until receipt of payment from the sender
of the order;

(b) When the bank receives payment of the entire
amount of the sender’s order pursuant to paragraph (a) or (b) of subsection 1
of NRS 104A.4403; or

(c) The opening of the next funds-transfer
business day of the bank following the payment date of the order if, at that
time, the amount of the sender’s order is fully covered by a withdrawable
credit balance in an authorized account of the sender or the bank has otherwise
received full payment from the sender, unless the order was rejected before
that time or is rejected within 1 hour after that time, or 1 hour after the
opening of the next business day of the sender following the payment date if
that time is later. If notice of rejection is received by the sender after the
payment date and the authorized account of the sender does not bear interest,
the bank is obliged to pay interest to the sender on the amount of the order
for the number of days elapsing after the payment date to the day the sender
receives notice or learns that the order was not accepted, counting that day as
an elapsed day. If the withdrawable credit balance during that period falls
below the amount of the order, the amount of interest payable is reduced accordingly.

3. Acceptance of a payment order cannot
occur before the order is received by the receiving bank. Acceptance does not
occur under paragraph (b) or (c) of subsection 2 if the beneficiary of the
payment order does not have an account with the receiving bank, the account has
been closed, or the receiving bank is not permitted by law to receive credits
for the beneficiary’s account.

4. A payment order issued to the
originator’s bank cannot be accepted until the payment date if the bank is the
beneficiary’s bank, or the execution date if the bank is not the beneficiary’s
bank. If the originator’s bank executes the originator’s payment order before
the execution date or pays the beneficiary of the originator’s payment order
before the payment date and the payment order is subsequently cancelled
pursuant to subsection 2 of NRS 104A.4211, the
bank may recover from the beneficiary any payment received to the extent
allowed by the law governing mistake and restitution.

1. A payment order is rejected by the
receiving bank by a notice of rejection transmitted to the sender orally,
electronically or in writing. A notice of rejection need not use any particular
words and is sufficient if it indicates that the receiving bank is rejecting the
order or will not execute or pay the order. Rejection is effective when the
notice is given if transmission is by a means that is reasonable in the
circumstances. If notice of rejection is given by a means that is not
reasonable, rejection is effective when the notice is received. If an agreement
of the sender and receiving bank establishes the means to be used to reject a
payment order, any means complying with the agreement is reasonable and any
means not complying is not reasonable unless no significant delay in receipt of
the notice resulted from the use of the noncomplying means.

2. If a receiving bank other than the
beneficiary’s bank fails to execute a payment order despite the existence on
the execution date of a withdrawable credit balance in an authorized account of
the sender sufficient to cover the order, the following rules apply:

(a) If the sender does not receive notice of
rejection of the order on the execution date and the authorized account of the
sender does not bear interest, the bank is obliged to pay interest to the
sender on the amount of the order for the number of days elapsing after the
execution date to the earlier of the day the order is cancelled pursuant to
subsection 4 of NRS 104A.4211 or the day the
sender receives notice or learns that the order was not executed, counting the
final day of the period as an elapsed day.

(b) If the withdrawable credit balance during
that period falls below the amount of the order, the amount of interest is
reduced accordingly.

3. If a receiving bank suspends payments,
all unaccepted payment orders issued to it are deemed rejected at the time the
bank suspends payments.

4. Acceptance of a payment order precludes
a later rejection of the order. Rejection of a payment order precludes a later
acceptance of the order.

1. A communication of the sender of a
payment order cancelling or amending the order may be transmitted to the
receiving bank orally, electronically or in writing. If a security procedure is
in effect between the sender and the receiving bank, the communication is not
effective to cancel or amend the order unless the communication is verified
pursuant to the security procedure or the bank agrees to the cancellation or
amendment.

2. Except as otherwise provided in
subsection 1, a communication by the sender cancelling or amending a payment
order is effective to cancel or amend the order if notice of the communication
is received at a time and in a manner affording the receiving bank a reasonable
opportunity to act on the communication before the bank accepts the payment
order.

3. After a payment order has been
accepted, cancellation or amendment of the order is not effective unless the
receiving bank agrees or a funds-transfer system rule allows cancellation or
amendment without agreement of the bank. The following rules also apply:

(a) With respect to a payment order accepted by a
receiving bank other than the beneficiary’s bank, cancellation or amendment is
not effective unless a conforming cancellation or amendment of the payment
order issued by the receiving bank is also made.

(b) With respect to a payment order accepted by
the beneficiary’s bank, cancellation or amendment is not effective unless the
order was issued in execution of an unauthorized payment order, or because of a
mistake by a sender in the funds transfer which resulted in the issuance of a
payment order that is a duplicate of a payment order previously issued by the
sender, that orders payment to a beneficiary not entitled to receive payment
from the originator, or that orders payment in an amount greater than the
amount the beneficiary was entitled to receive from the originator. If the
payment order is cancelled or amended, the beneficiary’s bank is entitled to
recover from the beneficiary any amount paid to the beneficiary to the extent
allowed by the law governing mistake and restitution.

4. An unaccepted payment order is
cancelled by operation of law at the close of the fifth funds-transfer business
day of the receiving bank after the execution date or payment date of the
order.

5. A cancelled payment order cannot be
accepted. If an accepted payment order is cancelled, the acceptance is
nullified and no person has any right or obligation based on the acceptance.
Amendment of a payment order is deemed to be cancellation of the original order
at the time of amendment and issue of a new payment order in the amended form
at the same time.

6. Unless otherwise provided in an
agreement of the parties or in a funds-transfer system rule, if the receiving
bank, after accepting a payment order, agrees to cancellation or amendment of
the order by the sender or is bound by a funds-transfer system rule allowing
cancellation or amendment without the bank’s agreement, the sender, whether or
not cancellation or amendment is effective, is liable to the bank for any loss
and expenses, including reasonable attorney’s fees, incurred by the bank as a
result of the cancellation or amendment or attempted cancellation or amendment.

7. A payment order is not revoked by the
death or legal incapacity of the sender unless the receiving bank knows of the
death or of an adjudication of incapacity by a court of competent jurisdiction
and has reasonable opportunity to act before acceptance of the order.

8. A funds-transfer system rule is not
effective to the extent it conflicts with paragraph (b) of subsection 3.

NRS 104A.4212Liability and duty of receiving bank regarding unaccepted
payment order.If a receiving bank
fails to accept a payment order that it is obliged by express agreement to
accept, the bank is liable for breach of the agreement to the extent provided
in the agreement or in this article, but does not otherwise have any duty to
accept a payment order or, before acceptance, to take any action, or refrain
from taking action, with respect to the order except as provided in this
article or by express agreement. Liability based on acceptance arises only when
acceptance occurs as stated in NRS 104A.4209, and
liability is limited to that provided in this article. A receiving bank is not
the agent of the sender or beneficiary of the payment order it accepts, or of
any other party to the funds transfer, and the bank owes no duty to any party
to the funds transfer except as otherwise provided in this article or by express
agreement.

1. A payment order is “executed” by the
receiving bank when it issues a payment order intended to carry out the payment
order received by the bank. A payment order received by the beneficiary’s bank
can be accepted but cannot be executed.

2. “Execution date” of a payment order
means the day on which the receiving bank may properly issue a payment order in
execution of the sender’s order. The execution date may be determined by
instruction of the sender but cannot be earlier than the day the order is
received and, unless otherwise determined, is the day the order is received. If
the sender’s instruction states a payment date, the execution date is the
payment date or an earlier date on which execution is reasonably necessary to
allow payment to the beneficiary on the payment date.

NRS 104A.4302Obligation of receiving bank in execution of payment order.

1. Except as otherwise provided in
subsections 2, 3 and 4, if the receiving bank accepts a payment order pursuant
to subsection 1 of NRS 104A.4209, the bank has
the following obligations in executing the order:

(a) The receiving bank is obliged to issue, on
the execution date, a payment order complying with the sender’s order and to
follow the sender’s instructions concerning any intermediary bank or
funds-transfer system to be used in carrying out the funds transfer, or the
means by which payment orders are to be transmitted in the funds transfer. If
the originator’s bank issues a payment order to an intermediary bank, the
originator’s bank is obliged to instruct the intermediary bank according to the
instruction of the originator. An intermediary bank in the funds transfer is
similarly bound by an instruction given to it by the sender of the payment
order it accepts.

(b) If the sender’s instruction states that the
funds transfer is to be carried out telephonically or by wire transfer or
otherwise indicates that the funds transfer is to be carried out by the most
expeditious means, the receiving bank is obliged to transmit its payment order
by the most expeditious available means, and to instruct any intermediary bank
accordingly. If a sender’s instruction states a payment date, the receiving
bank is obliged to transmit its payment order at a time and by means reasonably
necessary to allow payment to the beneficiary on the payment date or as soon
thereafter as is feasible.

2. Unless otherwise instructed, a
receiving bank executing a payment order may use any funds-transfer system if
use of that system is reasonable in the circumstances, and issue a payment
order to the beneficiary’s bank or to an intermediary bank through which a
payment order conforming to the sender’s order can expeditiously be issued to
the beneficiary’s bank if the receiving bank exercises ordinary care in the
selection of the intermediary bank. A receiving bank is not required to follow
an instruction of the sender designating a funds-transfer system to be used in
carrying out the funds transfer if the receiving bank, in good faith,
determines that it is not feasible to follow the instruction or that following
the instruction would unduly delay completion of the funds transfer.

3. Unless paragraph (b) of subsection 1
applies or the receiving bank is otherwise instructed, the bank may execute a
payment order by transmitting its payment order by first-class mail or by any
means reasonable in the circumstances. If the receiving bank is instructed to
execute the sender’s order by transmitting its payment order by a particular
means, the receiving bank may issue its payment order by the means stated or by
any means as expeditious as the means stated.

4. Unless instructed by the sender:

(a) The receiving bank may not obtain payment of
its charges for services and expenses in connection with the execution of the
sender’s order by issuing a payment order in an amount equal to the amount of
the sender’s order less the amount of the charges; and

(b) May not instruct a subsequent receiving bank
to obtain payment of its charges in the same manner.

1. A receiving bank that executes the
payment order of the sender by issuing a payment order in an amount greater
than the amount of the sender’s order, or issues a payment order in execution
of the sender’s order and then issues a duplicate order, is entitled to payment
of the amount of the sender’s order under subsection 3 of NRS 104A.4402 if that subsection is otherwise
satisfied. The bank is entitled to recover from the beneficiary of the
erroneous order the excess payment received to the extent allowed by the law
governing mistake and restitution.

2. A receiving bank that executes the
payment order of the sender by issuing a payment order in an amount less than
the amount of the sender’s order is entitled to payment of the amount of the
sender’s order under subsection 3 of NRS 104A.4402
if that subsection is otherwise satisfied and the bank corrects its mistake by
issuing an additional payment order for the benefit of the beneficiary of the
sender’s order. If the error is not corrected, the issuer of the erroneous
order is entitled to receive or retain payment from the sender of the order it
accepted only to the extent of the amount of the erroneous order. This
subsection does not apply if the receiving bank executes the sender’s payment
order by issuing a payment order in an amount less than the amount of the
sender’s order for the purpose of obtaining payment of its charges for services
and expenses pursuant to instruction of the sender.

3. If a receiving bank executes the
payment order of the sender by issuing a payment order to a beneficiary
different from the beneficiary of the sender’s order and the funds transfer is
completed on the basis of that error, the sender of the payment order that was
erroneously executed and all previous senders in the funds transfer are not
obliged to pay the payment orders they issued. The issuer of the erroneous
order is entitled to recover from the beneficiary of the order the payment
received to the extent allowed by the law governing mistake and restitution.

NRS 104A.4304Duty of sender to report erroneously executed payment order.If the sender of a payment order that is
erroneously executed as stated in NRS 104A.4303
receives notification from the receiving bank that the order was executed or
that the sender’s account was debited with respect to the order, the sender has
a duty to exercise ordinary care to determine, on the basis of information
available to the sender, that the order was erroneously executed and to notify
the bank of the relevant facts within a reasonable time not exceeding 90 days
after the notification from the bank was received by the sender. If the sender
fails to perform that duty, the bank is not obliged to pay interest on any
amount refundable to the sender under subsection 4 of NRS
104A.4402 for the period before the bank learns of the execution error. The
bank is not entitled to any recovery from the sender on account of a failure by
the sender to perform the duty stated in this section.

NRS 104A.4305Liability for late or improper execution or failure to execute
payment order.

1. If a funds transfer is completed but
execution of a payment order by the receiving bank in breach of NRS 104A.4302 results in delay in payment to the
beneficiary, the bank is obliged to pay interest to either the originator or
the beneficiary of the funds transfer for the period of delay caused by the
improper execution. Except as otherwise provided in subsection 3, additional damages
are not recoverable.

2. If execution of a payment order by a
receiving bank in breach of NRS 104A.4302 results
in noncompletion of the funds transfer, failure to use an intermediary bank
designated by the originator, or issuance of a payment order that does not
comply with the terms of the payment order of the originator, the bank is
liable to the originator for its expenses in the funds transfer and for
incidental expenses and interest losses, to the extent not covered by
subsection 1, resulting from the improper execution. Except as otherwise
provided in subsection 3, additional damages are not recoverable.

3. In addition to the amounts payable
under subsections 1 and 2, damages, including consequential damages, are
recoverable to the extent provided in an express written agreement of the
receiving bank.

4. If a receiving bank fails to execute a
payment order it was obliged by express agreement to execute, the receiving
bank is liable to the sender for its expenses in the transaction and for
incidental expenses and interest losses resulting from the failure to execute.
Additional damages, including consequential damages, are recoverable to the
extent provided in an express written agreement of the receiving bank, but are
not otherwise recoverable.

5. Reasonable attorney’s fees are
recoverable if demand for compensation under subsection 1 or 2 is made and
refused before an action is brought on the claim. If a claim is made for breach
of an agreement under subsection 4 and the agreement does not provide for
damages, reasonable attorney’s fees are recoverable if demand for compensation
under subsection 4 is made and refused before an action is brought on the
claim.

6. Except as stated in this section, the
liability of a receiving bank under subsections 1 and 2 may not be varied by
agreement.

NRS 104A.4401Payment date.“Payment
date” of a payment order means the day on which the amount of the order is
payable to the beneficiary by the beneficiary’s bank. The payment date may be
determined by instruction of the sender but cannot be earlier than the day the
order is received by the beneficiary’s bank and, unless otherwise determined,
is the day the order is received by the beneficiary’s bank.

2. With respect to a payment order issued
to the beneficiary’s bank, acceptance of the order by the bank obliges the
sender to pay the bank the amount of the order, but payment is not due until
the payment date of the order.

3. This subsection is subject to
subsection 5 and to NRS 104A.4303. With respect
to a payment order issued to a receiving bank other than the beneficiary’s
bank, acceptance of the order by the receiving bank obliges the sender to pay
the bank the amount of his or her order. Payment by the sender is not due until
the execution date of his or her order. The obligation of a sender to pay his
or her payment order is excused if the funds transfer is not completed by
acceptance by the beneficiary’s bank of a payment order instructing payment to
the beneficiary of that sender’s payment order.

4. If the sender of a payment order pays
the order and was not obliged to pay all or part of the amount paid, the bank
receiving payment is obliged to refund payment to the extent the sender was not
obliged to pay. Except as otherwise provided in NRS
104A.4204 and 104A.4304, interest is payable
on the refundable amount from the date of payment.

5. If a funds transfer is not completed as
stated in subsection 3 and an intermediary bank is obliged to refund payment as
stated in subsection 4 but is unable to do so because not permitted by
applicable law or because the bank suspends payments, a sender in the funds
transfer that executed a payment order in compliance with an instruction, as
stated in paragraph (a) of subsection 1 of NRS
104A.4302, to route the funds transfer through that intermediary bank is
entitled to receive or retain payment from the sender of the payment order that
it accepted. The first sender in the funds transfer that issued an instruction
requiring routing through that intermediary bank is subrogated to the right of
the bank that paid the intermediary bank to refund as stated in subsection 4.

6. The right of the sender of a payment
order to be excused from the obligation to pay the order as stated in
subsection 3 or to receive refund under subsection 4 may not be varied by
agreement.

1. Payment of the sender’s obligation
under NRS 104A.4402 to pay the receiving bank
occurs as follows:

(a) If the sender is a bank, payment occurs when
the receiving bank receives final settlement of the obligation through a
Federal Reserve bank or through a funds-transfer system.

(b) If the sender is a bank and the sender
credited an account of the receiving bank with the sender, or caused an account
of the receiving bank in another bank to be credited, payment occurs when the
credit is withdrawn or, if not withdrawn, at midnight of the day on which the
credit is withdrawable and the receiving bank learns of that fact.

(c) If the receiving bank debits an account of
the sender with the receiving bank, payment occurs when the debit is made to
the extent the debit is covered by a withdrawable credit balance in the
account.

2. If the sender and receiving bank are
members of a funds-transfer system that nets obligations multilaterally among
participants, the receiving bank receives final settlement when settlement is
complete in accordance with the rules of the system. The obligation of the
sender to pay the amount of a payment order transmitted through the
funds-transfer system may be satisfied, to the extent permitted by the rules of
the system, by setting off and applying against the sender’s obligation the
right of the sender to receive payment from the receiving bank of the amount of
any other payment order transmitted to the sender by the receiving bank through
the funds-transfer system. The aggregate balance of obligations owed by each
sender to each receiving bank in the funds-transfer system may be satisfied, to
the extent permitted by the rules of the system, by setting off and applying
against that balance the aggregate balance of obligations owed to the sender by
other members of the system. The aggregate balance is determined after the
right of setoff stated in the second sentence of this subsection has been
exercised.

3. If two banks transmit payment orders to
each other under an agreement that settlement of the obligations of each bank
to the other under NRS 104A.4402 will be made at
the end of the day or other period, the total amount owed with respect to all
orders transmitted by one bank shall be set off against the total amount owed
with respect to all orders transmitted by the other bank. To the extent of the
setoff, each bank has made payment to the other.

4. In a case not covered by subsection 1,
the time when payment of the sender’s obligation under subsection 2 or 3 of NRS 104A.4402 occurs is governed by applicable
principles of law that determine when an obligation is satisfied.

NRS 104A.4404Obligation of beneficiary’s bank to pay and give notice to
beneficiary.

1. Except as otherwise provided in
subsection 5 of NRS 104A.4211 and subsections 4
and 5 of NRS 104A.4405, if a beneficiary’s bank
accepts a payment order, the bank is obliged to pay the amount of the order to
the beneficiary of the order. Payment is due on the payment date of the order,
but if acceptance occurs on the payment date after the close of the
funds-transfer business day of the bank, payment is due on the next
funds-transfer business day. If the bank refuses to pay after demand by the
beneficiary and receipt of notice of particular circumstances that will give
rise to consequential damages as a result of nonpayment, the beneficiary may recover
damages resulting from the refusal to pay to the extent the bank had notice of
the damages, unless the bank proves that it did not pay because of a reasonable
doubt concerning the right of the beneficiary to payment.

2. If a payment order accepted by the
beneficiary’s bank instructs payment to an account of the beneficiary, the bank
is obliged to notify the beneficiary of receipt of the order before midnight of
the next funds-transfer business day following the payment date. If the payment
order does not instruct payment to an account of the beneficiary, the bank is
required to notify the beneficiary only if notice is required by the order.
Notice may be given by first-class mail or any other means reasonable in the
circumstances. If the bank fails to give the required notice, the bank is
obliged to pay interest to the beneficiary on the amount of the payment order
from the day notice should have been given until the day the beneficiary
learned of receipt of the payment order by the bank. No other damages are
recoverable. Reasonable attorney’s fees are also recoverable if demand for
interest is made and refused before an action is brought on the claim.

3. The right of a beneficiary to receive
payment and damages as stated in subsection 1 may not be varied by agreement or
a funds-transfer system rule. The right of a beneficiary to be notified as
stated in subsection 2 may be varied by agreement of the beneficiary or by a
funds-transfer system rule if the beneficiary is notified of the rule before initiation
of the funds transfer.

1. If the beneficiary’s bank credits an
account of the beneficiary of a payment order, payment of the bank’s obligation
under subsection 1 of NRS 104A.4404 occurs when
and to the extent the beneficiary is notified of the right to withdraw the
credit, the bank lawfully applies the credit to a debt of the beneficiary, or
funds with respect to the order are otherwise made available to the beneficiary
by the bank.

2. If the beneficiary’s bank does not
credit an account of the beneficiary of a payment order, the time when payment
of the bank’s obligation under subsection 1 of NRS
104A.4404 occurs is governed by principles of law that determine when an
obligation is satisfied.

3. Except as stated in subsections 4 and
5, if the beneficiary’s bank pays the beneficiary of a payment order under a
condition to payment or agreement of the beneficiary giving the bank the right
to recover payment from the beneficiary if the bank does not receive payment of
the order, the condition to payment or agreement is not enforceable.

4. A funds-transfer system rule may
provide that payments made to beneficiaries of funds transfers made through the
system are provisional until receipt of payment by the beneficiary’s bank of
the payment order it accepted. A beneficiary’s bank that makes a payment that
is provisional under the rule is entitled to refund from the beneficiary if the
rule requires that both the beneficiary and the originator be given notice of
the provisional nature of the payment before the funds transfer is initiated,
the beneficiary, the beneficiary’s bank and the originator’s bank agreed to be
bound by the rule, and the beneficiary’s bank did not receive payment of the
payment order that it accepted. If the beneficiary is obliged to refund payment
to the beneficiary’s bank, acceptance of the payment order by the beneficiary’s
bank is nullified and no payment by the originator of the funds transfer to the
beneficiary occurs under NRS 104A.4406.

5. This subsection applies to a funds
transfer that includes a payment order transmitted over a funds-transfer system
that nets obligations multilaterally among participants, and has in effect a
loss-sharing agreement among participants for the purpose of providing funds
necessary to complete settlement of the obligations of one or more participants
that do not meet their settlement obligations. If the beneficiary’s bank in the
funds transfer accepts a payment order and the system fails to complete
settlement pursuant to its rules with respect to any payment order in the funds
transfer:

(a) The acceptance by the beneficiary’s bank is
nullified and no person has any right or obligation based on the acceptance;

(b) The beneficiary’s bank is entitled to recover
payment from the beneficiary;

(c) No payment by the originator to the
beneficiary occurs under NRS 104A.4406; and

(d) Subject to subsection 5 of NRS 104A.4402, each sender in the funds transfer is
excused from its obligation to pay its payment order under subsection 3 of NRS 104A.4402 because the funds transfer has not
been completed.

NRS 104A.4406Payment by originator to beneficiary; discharge of underlying
obligation.

1. Except as otherwise provided in
subsection 5 of NRS 104A.4211 and subsections 4
and 5 of NRS 104A.4405, the originator of a funds
transfer pays the beneficiary of the originator’s payment order at the time a
payment order for the benefit of the beneficiary is accepted by the
beneficiary’s bank in the funds transfer and in an amount equal to the amount
of the order accepted by the beneficiary’s bank, but not more than the amount
of the originator’s order.

2. If payment under subsection 1 is made
to satisfy an obligation, the obligation is discharged to the same extent
discharge would result from payment to the beneficiary of the same amount in
money, unless:

(a) The payment under subsection 1 was made by a
means prohibited by the contract of the beneficiary with respect to the
obligation;

(b) The beneficiary, within a reasonable time
after receiving notice of receipt of the order by the beneficiary’s bank,
notified the originator of the beneficiary’s refusal of the payment;

(c) Funds with respect to the order were not
withdrawn by the beneficiary or applied to a debt of the beneficiary; and

(d) The beneficiary would suffer a loss that
could reasonably have been avoided if payment had been made by a means
complying with the contract.

Ê If payment
by the originator does not result in discharge under this section, the
originator is subrogated to the rights of the beneficiary to receive payment
from the beneficiary’s bank under subsection 1 of NRS
104A.4404.

3. For the purpose of determining whether
discharge of an obligation occurs under subsection 2, if the beneficiary’s bank
accepts a payment order in an amount equal to the amount of the originator’s
payment order less charges of one or more receiving banks in the funds
transfer, payment to the beneficiary is deemed to be in the amount of the
originator’s order unless upon demand by the beneficiary the originator does
not pay the beneficiary the amount of the deducted charges.

4. Rights of the originator or of the
beneficiary of a funds transfer under this section may be varied only by
agreement of the originator and the beneficiary.

NRS 104A.4501Variation by agreement and effect of funds-transfer system rule.

1. Except as otherwise provided in this
article, the rights and obligations of a party to a funds transfer may be
varied by agreement of the affected party.

2. “Funds-transfer system rule” means a
rule of an association of banks governing transmission of payment orders by
means of a funds-transfer system of the association or rights and obligations
with respect to those orders, or to the extent the rule governs rights and
obligations between banks that are parties to a funds transfer in which a
Federal Reserve bank, acting as an intermediary bank, sends a payment order to
the beneficiary’s bank. Except as otherwise provided in this article, a
funds-transfer system rule governing rights and obligations between
participating banks using the system may be effective even if the rule conflicts
with this article and indirectly affects another party to the funds transfer
who does not consent to the rule. A funds-transfer system rule may also govern
rights and obligations of parties other than participating banks using the
system to the extent stated in subsection 3 of NRS
104A.4404, subsection 4 of NRS 104A.4405, and
subsection 3 of NRS 104A.4507.

1. As used in this section, “creditor’s
process” means levy, attachment, garnishment, notice of lien, sequestration, or
similar process issued by or on behalf of a creditor or other claimant with
respect to an account.

2. If creditor’s process with respect to
an authorized account of the sender of a payment order is served on the
receiving bank, and the receiving bank accepts the payment order, the balance
in the authorized account available for satisfaction of the creditor’s process
is deemed to be reduced by the amount of the payment order to the extent the
bank did not otherwise receive payment of the order, unless the creditor’s
process is served at a time and in a manner affording the bank a reasonable
opportunity to act on it before the bank accepts the payment order.

3. If a beneficiary’s bank has received a
payment order for payment to the beneficiary’s account in the bank, the
following rules apply:

(a) The bank may credit the beneficiary’s
account. The amount credited may be set off against an obligation owed by the
beneficiary to the bank or may be applied to satisfy creditor’s process served
on the bank with respect to the account.

(b) The bank may credit the beneficiary’s account
and allow withdrawal of the amount credited unless creditor’s process with
respect to the account is served at a time and in a manner affording the bank a
reasonable opportunity to act to prevent withdrawal.

(c) If creditor’s process with respect to the beneficiary’s
account has been served and the bank has had a reasonable opportunity to act on
it, the bank may not reject the payment order except for a reason unrelated to
the service of process.

4. Creditor’s process with respect to a
payment by the originator to the beneficiary pursuant to a funds transfer may
be served only on the beneficiary’s bank with respect to the debt owed by that
bank to the beneficiary. Any other bank served with the creditor’s process is
not obliged to act with respect to the process.

NRS 104A.4504Order in which items and payment orders may be charged to account;
order of withdrawals from account.

1. If a receiving bank has received more
than one payment order of the sender or one or more payment orders and other
items that are payable from the sender’s account, the bank may charge the
sender’s account with respect to the various orders and items in any sequence.

2. In determining whether a credit to an
account has been withdrawn by the holder of the account or applied to a debt of
the holder of the account, credits first made to the account are first withdrawn
or applied.

NRS 104A.4505Preclusion of objection to debit of customer’s account.If a receiving bank has received payment from
its customer with respect to a payment order issued in the name of the customer
as sender and accepted by the bank, and the customer received notification
reasonably identifying the order, the customer is precluded from asserting that
the bank is not entitled to retain the payment unless the customer notifies the
bank of his or her objection to the payment within 1 year after the
notification was received by him or her.

1. If, under this article, a receiving
bank is obliged to pay interest with respect to a payment order issued to the
bank, the amount payable may be determined:

(a) By agreement of the sender and receiving
bank; or

(b) By a funds-transfer system rule if the
payment order is transmitted through a funds-transfer system.

2. If the amount of interest is not
determined by an agreement or rule as stated in subsection 1, the amount is
calculated by multiplying the applicable Federal Funds rate by the amount on
which interest is payable, and then multiplying the product by the number of
days for which interest is payable. The applicable Federal Funds rate is the
average of the Federal Funds rates published by the Federal Reserve bank of New
York for each of the days for which interest is payable divided by 360. The
Federal Funds rate for any day on which a published rate is not available is
the same as the published rate for the next preceding day for which there is a
published rate. If a receiving bank that accepted a payment order is required
to refund payment to the sender of the order because the funds transfer was not
completed, but the failure to complete was not due to any fault by the bank,
the interest payable is reduced by a percentage equal to the reserve
requirement on deposits of the receiving bank.

1. The following rules govern choice of
law unless the affected parties otherwise agree or subsection 3 applies:

(a) The rights and obligations between the sender
of a payment order and the receiving bank are governed by the law of the
jurisdiction in which the receiving bank is located.

(b) The rights and obligations between the
beneficiary’s bank and the beneficiary are governed by the law of the
jurisdiction in which the beneficiary’s bank is located.

(c) The issue of when payment is made pursuant to
a funds transfer by the originator to the beneficiary is governed by the law of
the jurisdiction in which the beneficiary’s bank is located.

2. If the parties described in each
paragraph of subsection 1 have made an agreement selecting the law of a
particular jurisdiction to govern rights and obligations between each other,
the law of that jurisdiction governs those rights and obligations, whether or
not the payment order or the funds transfer bears a reasonable relation to that
jurisdiction.

3. A funds-transfer system rule may select
the law of a particular jurisdiction to govern rights and obligations between
participating banks with respect to payment orders transmitted or processed
through the system, or the rights and obligations of some or all parties to a
funds transfer any part of which is carried out by means of the system. A
choice of law concerning rights and obligations between participating banks is
binding on participating banks. A choice of law concerning rights and
obligations of parties generally is binding on the originator, other sender, or
a receiving bank having notice that the funds-transfer system might be used in
the funds transfer and of the choice of law by the system when the originator,
other sender, or receiving bank issued or accepted a payment order. The
beneficiary of a funds transfer is bound by the choice of law if, when the funds
transfer is initiated, the beneficiary has notice that the funds-transfer
system might be used in the funds transfer and of the choice of law by the
system. The law of a jurisdiction selected pursuant to this subsection may
govern, whether or not that law bears a reasonable relation to the matter in
issue.

4. In the event of inconsistency between
an agreement under subsection 2 and a choice-of-law rule under subsection 3,
the agreement under subsection 2 prevails.

5. If a funds transfer is made by use of
more than one funds-transfer system and there is inconsistency between
choice-of-law rules of the systems, the matter in issue is governed by the law
of the selected jurisdiction that has the most significant relationship to the
matter in issue.